Click-and-Collect Grocer Fresh Street Launches in Chicago, Looking to Upend Traditional Shopping

The Windy City will soon welcome a new grocery store, but don’t expect to walk in and start shopping. Fresh Street is built exclusively for online, click-and-collect shopping.

Offering no substitutions, no fees and affordable local products such as This Little Goat, Milk & Honey, Heywell Sparkling, Chicago French Press and more, Fresh Street will serve as a convenient way for Chicagoans to get their groceries, starting March 18 at 6191 N. Lincoln Ave., with a grand opening reception with local vendors and partners, including the City of Chicago.

“Chicago is the number one city for food innovation and logistics in the country, both sectors are strong drivers of our city’s economic recovery, job growth and neighborhood expansion,” said Michael Fassnacht, president & CEO of World Business Chicago, and chief marketing officer for the  City of Chicago, in a statement. “In this spirit, we are incredibly pleased to join Fresh Street today for the launch of its online grocery platform in West Rogers Park. We look forward to seeing this new grocery option represent legacy and emerging Chicago food brands as it grows and expands throughout the city and country.”

On the heels of securing $4 million in seed round funding this past October, Fresh Street said it has one goal in mind: a satisfied customer. The grocer said its mobile app (iOS and Android) or desktop experience promises users no substitutions and only real-time inventory. Without customers in-store, the app always reflects real volume, the company said, and pickups will be available within 30 minutes of placing an order. In fact, the 10,000-square-foot location is all about curbing the friction that plagues grocery pickup experiences the company said.

Mike Sayles

Mike Sayles, founder and CEO of Fresh Street, started the company with the goal of providing families with a more convenient and affordable online grocery shopping alternative. Prior to Fresh Street, Sayles spent eight years at Ferrara Candy Co. holding a variety of positions. Most recently, he was CCO, where he led the Ferrara sales department and was responsible for more than 220 team members and $2.5 billion of revenue, inclusive of Ferrara’s e-commerce business. Sayles spoke with Winsight Grocery Business recently about Fresh Street's aim for affordability and what makes it different from other grocers.

Diane Adam: Fresh Street is something that the grocery industry hasn’t seen before. What was your framing thought for Fresh Street and what makes it different?

Mike Sayles: If you think about the grocery industry today—and all these retailers—their business has always been an in-store experience. No one built a Jewel in the 1990s and said someday someone’s going to want to use the internet to buy their groceries and we need to be ready for that. What you have now is many people trying to retrofit to accommodate online grocery shopping, but what you don’t have is what we want to provide—the absolute best online grocery shopping possible end to end. With a blank sheet of paper to our credit, we could think through how do we design the website and the app in a way that is user-friendly.

Inflation is at an all-time high overall, how will Fresh Street ensure affordability to its customers?

Other retailers are operating on much larger square feet, and Fresh Street is much smaller so there is costs savings. Faster and easier to shop the store allows us to be more efficient from an overall cost perspective by virtue of operating in a model that is not trying to support both in-store and online. We just want to support the online shopper, and provide the best possible experience. Our consumer research showed that shoppers like delivery, but they don’t want to have to pay for it. And that is really problematic and that is why we are seeing all these articles coming out about different rapid grocery delivery businesses who are losing a lot of money on each order because they are absorbing the cost. And that is not sustainable in the longer term and more fees are starting to creep in with those places. Our model allows us to say we’re not going to charge for pickup; we’re not going to change a different price point online. We save families time through our easy-to-use app and website, as well as efficient pickup experience. The result is a better, faster, more reliable shopping experience, giving families time back for the things that really matter.

There are many different variables that come with your business model. Explain some of them that you see as a benefit?

One thing I love about our model is that it’s super flexible. We don’t have dedicated planograms like a grocery retailer does. We can customize the assortment based on the neighborhood we are in, and it’s very easy for us to do that and it also allows us to partner with local businesses.  

With labor shortages a challenge across the board, how will Fresh Street tackle this growing problem and how have you built that into your business model?

I believe in really strong wages and I believe in hiring great talent. If you pay people well and provide a great work environment, people are going to want to stay. If you start scraping at the bottom of the barrel with what you’re offering to pay people ... people catch on to that. We are paying $25 an hour and I think decent benefits package to folks. And we’re trying to make a good work-home balance. We are fully staffed at this point.