At 40, Wawa chain continues to grow by expanding offerings

The chain with the Indian name meets ever-growing competition head-on.
FOLSOM, Pa. (AP) -- A dairy store named for the Lenape Indian word for Canada goose has grown in four decades into a chain of 541 Wawa Inc. convenience stores in five states.
The goose continues to lay golden eggs to the tune of $2.8 billion in annual sales that include 125 million cups of coffee and 30 million hoagies and sandwiches.
The first Wawa store, 10 miles west of Philadelphia, put pints of ice cream on sale for 40 cents April 16 to mark the 40 years since it opened to sell dairy products, produce and basic deli food people might need between shopping trips.
Many makeovers later, it and other Wawa stores now sell breakfast coffee, doughnuts, and egg sandwiches that workers take to the job site and business travelers take on the road, and hoagies, bagel melts, salads and fruit for lunch. Many sell gas, now a must in the convenience store business.
"The shift has been from fill-in groceries to immediate-consumption items. I'm thirsty, I'm hungry, I need my morning coffee, I need money from the MAC machine. We don't surcharge for the MAC machine," said Howard Stoeckel, Wawa's president and chief operating officer.
Wide-ranging competition
Wawa is gassing up and bulking up to compete not only with other convenience stores but also with neighboring fast-food restaurants, doughnut shops and gas stations expanding their food offerings, in what has become a free-for-all for the spur-of-the-moment grocery buy.
"We compete against 7-Eleven, we compete against Dunkin' Donuts, we compete against McDonald's, and we are in the fuel business," Stoeckel said.
Wawa is adding more gas pumps and building bigger stores so more customers can get what they want in one quick stop. All new stores will sell gas.
The company also tries to give stores a neighborly feel "where you can be known by your first name and get your day off on the right foot," Stoeckel said.
Coffee is still the No. 1 lure in the morning. "That's why customers come to us multiple times every week," Stoeckel said.
Gasoline sales
More than 80 percent of convenience stores nationally sell gas, from the largest chain, 7-Eleven, to the one-store mom-and-pop operations that still make up 58.2 percent of convenience outlets, according to the National Association of Convenience Stores.
Dallas-based 7-Eleven is still the industry behemoth, with 5,800 company-owned and franchise stores in the United States and Canada, 20,000 stores operated by licensees in 17 other countries, and $10.9 billion in annual revenues. Last year it sold 2.1 billion gallons of gasoline for $3.4 billion.
Wawa, which is privately held, declined to reveal gas sales figures. Jeff Lenard, spokesman for the convenience store association, said gas and diesel fuel account for nearly two-thirds of convenience-store revenues nationally, but only 40 percent of profits as stores keep prices low to lure customers.
Wawa is among the top 25 regional chains that compete with 7-Eleven in various parts of the country, Lenard said.
On Forbes list
Wawa said its annual sales have reached $2.8 billion. The chain rose to 72nd on Forbes magazine's list of the top 500 privately held companies last year, up from 88th in 2002, and 170th five years earlier.
Hot on its heels in mid-Atlantic states is Pennsylvania-based Sheetz, which started with a dairy and restaurant in Altoona and has grown to about 300 stores and $2.4 billion in sales.
Stoeckel said constant change is the key to success, and a family tradition at Wawa. Company Chairman Dick Wood's ancestors operated a textile company, Millville Manufacturing, in New Jersey.
"What we do differently from our competitors is build bigger sites, we have more multiple dispenser pumps," Stoeckel said. Wawa averages 16 per store, nearly double the industry average.
Copyright 2004 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.