Saturday, February 24, 2018
Business

Wawa, Thorntons bring competition to convenience store market

When Wawa expands into the Tampa Bay area, shoppers will flock to the convenience stores for built-to-order hoagies, gourmet coffee and freshly made salads. • Circle K, 7-Eleven and other convenience stores most certainly will feel the squeeze. But so will McDonald's, Subway, Starbucks, Panera Bread and drug stores — retailers that carry similar products for people in a hurry. • "We compete with everyone,'' said Howard Stoeckel, chief executive officer of the Pennsylvania-based Wawa. • Wawa has aggressive plans for the area — opening five stores in the next few months and up to 100 stores in the Tampa Bay/Orlando market within five years. So does Thorntons, a smaller convenience store chain that's opening stores in Clearwater and Tampa next month and up to 20 more in the next three years.

Combined, the popular northern chains will make the local convenience store market even more competitive, said Steven Montgomery, president of b2b Solutions, a convenience store consulting company. To survive, stores will have to upgrade their sites, improve customer service and lower fuel prices.

"The minute they announced they were coming, I would have done everything I could to make sites more competitive,'' he said. "It may be a case of being the best of the rest.''

Montgomery expects older, less profitable stores could go out of business because they lack the newness, ample parking and selection of their competitors. They also can't compete on the price of gas, which already has a slim profit margin of pennies per gallon.

Wawa and Thorntons offer an upscale convenience store experience with freshly prepared foods, sandwiches, gourmet coffee and fountain drinks, more in line with fast-casual restaurants than truck stops. They sell gasoline, too, but primarily as a way to drive shoppers into the large, attractive stores.

The high-volume chains chose the area based on availability of sites and the large population of people moving here from the North. It helped that the Sunshine State already has lots of transplants loyal to their brands.

Wawa, the larger of the two chains with about 595 locations, was named after the American Indian word for Canada goose. Kentucky-based Thorntons was named after founder James H. Thornton, whose son, Matt, now runs the 165-store chain.

"This is the probably the most significant, strategic, geographic initiative we've ever moved on in our 48 years,'' Stoeckel said. "We want to be a part of the Florida community and create a new Wawaland every bit as robust as what exists in the mid-Atlantic.''

Wawa opened its first six stores in Florida a few months ago in the Orlando area amid big fanfare. Gov. Rick Scott attended a grand opening and has been a major driving force in helping the company locate to Florida, Stoeckel said. Customers drove from as far away as Tampa to buy the stores' signature hoagies.

"Consumers are looking at us not as a convenience store,'' he said. "They are perceiving us as a food service establishment.''

Wawa plans to focus its growth on Florida over the next two decades, potentially with 300 to 400 additional stores. Each averages 5,500 square feet, significantly more than an average convenience store, costs $5 million to $6 million to construct and employs about 50 people.

Thorntons is similarly known for its fresh food but also for its flavored fountain drinks, ice nuggets and selection of beer, stored in a "beer cave.'' Its first store in Florida is scheduled to open Dec. 4 along Gulf-to-Bay Boulevard in Clearwater.

Competitors such as 7-Eleven, the largest convenience store in the country with 7,000 stores, are undeterred. The chain has 185 stores in the Tampa Bay area and expects to open 15 more next year.

Without commenting directly on Wawa and Thorntons, 7-Eleven differentiates itself from others with its private brand labels, value pricing and product selection, said Margaret Chabris, a spokeswoman for the Dallas-based chain. Much like people call facial tissue Kleenex, 7-Eleven has become synonymous with convenience stores.

Unlike many competitors, the company has looked beyond traditional busy street corners for places to open new stores, including ones in urban areas, college campuses and even airports.

"We are extremely flexible in where we can go,'' she said. "People need the convenience.''

Still, the allure of new and different will entice many consumers to give Wawa and Thorntons a try, Montgomery said.

"You open a new shiny store, it has curb appeal,'' he said. "In a market that's long been established with stores on smaller sites and not much parking, this will be wow.''

 
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