By 2019, Steve McKinley was looking for something new.
The veteran retailer had held leadership positions with companies like Dollar General, Officemax and Circuit City for nearly three decades. This time, he wanted to start his own venture.
He found it in a 1,300-unit apartment building in McKinney, Texas, about 30 miles north of downtown Dallas.
“Underneath the apartments, they had this empty space of about 1,500 square feet, and it had been empty for years,” McKinley said. “My son called me, and he goes, ‘Dad, you should put a store here.’”
McKinley met with the building developer, who wanted to fill the space with something that would provide tenants with daily needs without them having to leave the building. That’s when he realized a convenience store was the perfect setup.
“It was a great opportunity to develop this concept of a full-service amenity for high-density apartment communities,” he said.
In October 2019, McKinley opened the first Urban Value Corner Store in that same McKinney apartment complex. While the initial response from tenants was positive, the company struck gold a few months later when the COVID-19 pandemic kept the building tenants at home — and coming to the store.
“I thought to myself, ‘Gosh, if it's working here, it's going to work in other high-density apartment communities as well,’” McKinley said.
Less than four years later, Urban Value now has eight locations in the Dallas area, and McKinley is hoping to reach 12 by the end of 2023.
But Urban Value has bigger growth plans in sight. It’s looking to open stores in other apartment buildings nationwide, with the mission at each location remaining the same: Making the tenants’ living experience as seamless as possible.
“You’ve got to have great pools, great gyms and dog parks, but every [apartment complex] has those,” he said. “So what's going to separate you from everyone else?”
Inside the store
The first step to opening a new Urban Value Corner Store is getting in touch with the apartment building developers, McKinley said. He and his team belong to apartment associations in various cities and states, and even attend real estate trade shows to scope out potential partners.
Once a connection is made, the deal making begins.
“Our pitch is, ‘Hey, I have a way to improve the living experience of your residents — let me walk you through it,’” McKinley said.
McKinley then discusses the concept of an Urban Value, which is similar to traditional c-stores in some ways, but different in others.
These locations don’t have lottery machines or ATMs, and while they offer tobacco products, McKinley purposely avoids building the sort of tobacco wall seen behind the register at many c-stores to maintain a more high-class image, he said.
On the foodservice side, Urban Value is all-in on frozen and pre-made food products, such as sandwiches, burritos, salads, wraps, pizza and other grab-and-go options. McKinley said there’s no cooking or food prep done on site to keep the stores clean and to make it easier to obtain health permits.
Packaged beverages are the star of the show. Urban Value has up to three beverage coolers in each store, and sales of energy drinks currently account for 10% to 12% of the company’s total business, McKinley said. Residents have made it known they prioritize beverages at these locations, he noted.
Urban Value also works with local vendors in each area where it operates, specifically bringing in products like chips and hot sauce from companies around town. Overall, the company has about 900 SKUs in each store, he said.
“Every [developer] I've interacted with, they have this vision of what a c-store typically looks like, and the first response is ‘No,’” he said. “So then [they] come out and visit our store, and within five minutes they go ‘Okay, we get it.’”
McKinley said he typically targets developments with at least 500 to 600 units, since that’s the amount of residents the business needs to make it economically viable.
Find and retain talent
The hunt for talent is something Urban Value has in common with traditional c-store retailers. McKinley and his team schedule interviews with 10 to 15 candidates for every new position, and many prospects don’t even show up for the meetings, McKinley said.
While he seeks people with a history of working in a customer-facing role, many of McKinley’s new hires have little to no retail experience, he said. Instead, he’s brought on young, eager people who are ready to learn the business, and many of these people have stuck around all four years the company has existed.
Urban Value currently has 28 employees on its entire team, and expects to double that within the next year or so as it grows its footprint.
“[The employees] really like what we're doing,” he said. “It's a good environment to work in.”
That environment includes flexible hours on the job. Urban Value’s store managers work Monday through Friday, and usually leave by 4 p.m., while assistant managers arrive in the mid-afternoon and close up around 9:30 p.m. every day of the week. Each store typically has three full-time staffers on the payroll.
“Go do what you need to do, and have a life outside your job,” he said.
Beyond the flexibility, Urban Value’s employees have embraced the company’s culture, which says that every decision — from merchandising to policies — must be made to improve residents’ experiences, McKinley said.
Urban Value implements its ASAP philosophy, which stands for acknowledging the customer, speed of service, availability and product knowledge. The retailer also has a philosophy called “100/0,” with 100 standing for being 100% accountable for the residents, and zero meaning no excuses.
“When people sign up for us to work, they know, ‘Hey, this is our culture. This is why we're successful. This is why developers are embracing what we're doing,’” McKinley said.
Sticking to the basics
McKinley is thinking big for Urban Value’s nationwide expansion. Not only does he plan to target Houston and San Antonio, but outside of Texas, he’s looking at Phoenix, Denver, Atlanta and various regions in Florida and the Carolinas.
At the end of June, McKinley signed a letter of intent for a store in Charlotte, North Carolina — the first Urban Value outside of Texas. It’s slated to open during the first quarter of 2024, he said.
Beyond more locations in new markets, Urban Value also plans to build and launch a mobile app to pair with its existing loyalty program. The retailer has already spoken with loyalty companies about how they can integrate an app with their loyalty program and point of sale system.
“It's one of those things that once we make a decision, it's got to be the right platform so we can duplicate it and make it work,” McKinley said.
McKinley’s confidence in these growth plans stems from his philosophy to not only bring the best service to the residents, but to keep Urban Value’s playbook simple and stick to what it’s good at. This means keeping the stores clean, conducting due diligence on new vendors or products and upholding its ASAP environment.
“I think where entrepreneurs fail is they try to overcomplicate the playbook,” he said. “So the message I get to my team is if you're great at the basics, everything else is going to come.”