Canal Park staple Amazing Grace Bakery and Cafe is reopening as a grocery store — called Amazing Grace Grocery and Cafe — in the second week of July.

Along with the new operation also comes an expansion into the wholesale bread market. Challenges related to the COVID-19 pandemic caused the changes for the cafe at 394 S. Lake Ave., in the DeWitt–Seitz Marketplace building.

The cafe, which opened in 1995, isn't going away completely. Amazing Grace will still have space for about 20-30 sit-down diners. Because of COVID-19, this will open up gradually and initially offer takeout and patio dining. They'll still have some breakfast items — those that travel well — available for pickup as well as wine, beer and coffee drinks, said owner Connor Riley.

"It's gonna look really cool, and it's still gonna have … a really warm, inviting, kind of homey feel," he said.

The business is transforming about three-quarters of the dining space into the grocery store. Riley has removed the tile flooring as well as countertops and bars, which he is replacing with freezers and shelving.

The store will sell local foods such as eggs, dairy, produce and more, as well as everyday necessities like diapers, reusable cutlery and more, Riley said.

With no other grocery stores in the area, the new store will fill a need in the neighborhood, Riley said. Park Point's Bay Side Market closed in 2008. The lack of nearby goods is something Riley has firsthand experience with. When he moved to Duluth to take over Amazing Grace from his mother in 2016, he lived in Canal Park with his child. Riley found it difficult to locate diapers and other necessities nearby, and has seen others also struggle with it, like tourists who stop by Amazing Grace and ask where to find these same items, he said.

"Everyone usually wants to kind of stay in Canal Park and then keep going up the shore. (They) spend every minute as close to the water as (they) can," Riley said.

The cafe also faced challenges with the pandemic. It closed March 15, and Riley realized the only way to survive was to embrace change. "If we dig our heels in … we're gonna be gone," he said.

Amazing Grace will also be stocking its bakery items in a larger number of stores in the region. It already delivers items to Duluth's two Whole Foods Co-ops and has plans to expand as far as the Twin Cities. Bakery items such as its multigrain bread, sourdough, parmesan-herb sourdough and honey wheat bread will all be available on new shelves, Riley said.

The move to wholesale came from his appreciation of how retailers don't waste bakery items they purchased. "We just really like that aspect of it," he said. It's also easy to make and delivery standing orders, and Amazing Grace's lead baker has experience working with larger orders.

Eventually, they hope to add a grocery delivery service, which could be needed if there's another surge in the virus, he said.