The future plan at Wawa, Inc. seems fundamental: aggressively open new stores, enhance its “fast casual to go” offering, optimize its Florida stores, increase customer engagement, reinvent store design, and accelerate innovation and productivity.
However, according to Chris Gheysens, the chief executive officer for the Wawa, PA based convenience store chain, it’s all about the execution of the plan, adding that his company’s point of difference is the human and emotional connection between its associates and its customers (which he termed the “essence of Wawa”) who visit the retailer’s 639 stores which serve approximately 1.5 million consumers daily.
Gheysens, a native of Vineland, NJ (prime Wawa country), joined the convenience store organization in 1997, and previously served as the retailer’s chief financial officer before being named CEO at the beginning of 2013. He replaced industry icon Howard Stoeckel, who had been Wawa’s chief executive since 2005 (Stoeckel remains on Wawa’s board). Gheysens made his comments before a capacity crowd of 260 students and industry leaders at the annual Pat McCarthy Lecture Series held at Saint Joseph’s University in Philadelphia earlier this month.
Gheysens’ passionate and wide ranging 75 minute session offered rare insight into a very successful privately-held retail organization that is usually guarded about its strategy.
He noted that Wawa has ramped up its new store opening plans and by the end of the year will have cut the ribbon on 51 new units (28 in Florida and 23 in its core Mid-Atlantic region – Pennsylvania, New Jersey, Delaware, Maryland and Virginia) and projects to have 651 units operating by year’s end. Gheysens also stated that, other than Florida, Wawa is targeting Northern New Jersey (where it opened a new design prototype in Lodi last month) as an aggressive growth marketing area.
In assessing the c-store chain’s “fast casual to go” concept, Gheysens said that his company’s goal is provide a quality dining experience with world-class convenience (in and out within five minutes).
“We exist to simplify our customers’ daily lives,” he asserted, adding that as a “gas station that sells good food,” execution is always important and it all begins with Wawa’s 22,000 associates.
He detailed Wawa’s “servant leadership” philosophy, a concept that includes humility, respect, accountability and a credo that places authority over power. All of those tenets fall under an umbrella where people come first. However, he stated, “We still are a for-profit business and need to satisfy the company’s shareholder expectations.”
Gheysens noted that Wawa’s goals and strategic initiatives are greatly aided by the company’s privately-held status (40 percent of the company is owned by the George Wood Trust, 37 percent by the associates, and 11 percent is controlled by George Wood’s descendants – the Wood family’s businesses including Wawa date back more than 200 years).
“We will never go public,” Gheysens declared. “Our success in large part is due to our flexibility and our ability to make long-term decisions.”
He pointed to Wawa’s initiative to expand to Florida in July 2012, noting that the retailer now operates 30 stores in the Tampa-Orlando corridor with many more on the way.
“Our metrics in Florida are very good and we’re very pleased with our progress, but we’re going to post a $25 million loss this year. If we were publicly-traded, that type of investment and loss would not be tolerated very well,” said the 42 year old CEO.
Gheysens explained that being privately-held with a large percentage of the company being associate-owned not only provides an incentive for its employee shareholders, the trickle-down effect also engenders loyalty and strong customer service.
In detailing Wawa’s Florida strategy, Gheysens said the company knew that about 30 percent of its potential customers were already familiar with the Wawa brand and there was a real opportunity to offer consumers a clear differential in area that is comparable in size to the chain’s core market footprint.
Using its strong fuel program, Wawa targeted the Orlando market first, as it focused on areas that had extraordinarily high fuel prices (including gas stations near the OrlandoInternationalAirport, which were selling fuel for as much as $5.99 per gallon). Wawa opened its OIA location selling regular gas at $1.99 per gallon (and sold an impressive 165,000 gallons in the first three days).
The c-store merchant also redesigned its stores to offer a more restaurant-style look and transferred its “best and brightest” associates to establish the company’s culture 1,500 miles from its corporate base. Wawa is currently opening about two stores per month in the SunshineState.
Gheysens noted that logistics and supply chain issues remain challenges as the company is still draying some products from the Delaware Valley to Florida, which the youthful CEO said is not particularly efficient, adding that some Wawa items are proprietary and need to be handled in that manner.
He also thanked some of Wawa’s vendors and supply chain partners including McLane, and Amoroso’s (Omni Baking).
Asserting that innovation and productivity remain essential ingredients for Wawa’s future success, Gheysens explained that offering fresh baked rolls in its stores and rolling out 22 varieties of espresso based beverages have helped the company build sales by creating a spark and connection with its customers. He noted that the company’s “espresso” program offered a $1.99 retail price and now features a specialized “holiday cup,” which has enhanced sales as well. He noted that the company’s new “club sandwich” program (made with ingredients already available in the company’s deli) has also created excitement. Another new item under consideration is a “super-charged” smoothie (with spinach or oatmeal).
In responding to questions from the Academy of Food Marketing students, Gheysens urged the group to “follow your passion and be true to yourself,” adding, “your public voice and private voice should be in alignment.” The Villanova graduate who received his MBA from Saint Joe’s also urged the students to find a mentor who could provide career guidance.
“Leadership is important, develop a style and stick with it,” he revealed.
When asked about his challenges as chief executives for a $7 billion company, Gheysens commented that the business part was easy; it’s the people aspect that I’m always concerned with. “Are our associates happy, are we treating them right?” he acknowledged.