When you're the new kid in town,it doesn't matter how big a deal you were back home. You have to prove yourself all over again.
That's the situation Wawa Inc. put itself in when it decided to leapfrog down the Eastern Seaboard, moving from its base in Pennsylvania and the Northeast into Florida. The convenience-store chain, whose name means "goose" in a Native American language, followed the migration path of millions of birds (and their snowbird human counterparts) when it opened its first Florida store in July 2012 in Orlando.
It was a bold move for a company whose base extended only as far south as northern Virginia, and it seems to be working out. Wawa now has about 85 stores in central Florida, for a total of more than 850, in Pennsylvania, Maryland, Virginia, New Jersey and Delaware. It's No. 38 on the Forbes list of private companies, with an estimated $9.3 billion in sales.
So how did Wawa make the move South so successfully? Basically, by doing a lot of things right, says Steven Montgomery, president of b2b Solutions LLC, a consulting firm that specializes in convenience stores.
"Two of the biggest issues faced when operating in a non-congruent market (especially one as distant as what Wawa selected) is having the necessary support infrastructure and brand awareness," Montgomery says. "Wawa has successfully overcome both."
Wawa did its homework–several years' worth–before deciding on Florida as its new territory. Company executives had a mandate to go literally anywhere in the country that looked promising. They started crunching demographic information back in 2005 on dozens of U.S. cities, visiting locations including Boston, New York, Seattle, Maine and San Diego as well as Florida.
There was a lot at stake. "This was a huge endeavor, because we didn't want to just open a store here and there," Peter Gilligan, Wawa's then-director of site acquisition, said in a news article for the website of Drexel University's business school. "We wanted to open a bunch of new stores. This was about long-term growth in uncharted territory."
Opening a lot of stores was an important factor in Wawa's success in Florida, Montgomery says.
"Before opening in the market, the company ensured there were sufficient locations that would support their business format," he says. "They then secured a sufficient number of locations in reasonable proximity to allow them to operate effectively. Next, they planned and opened locations in fairly rapid succession. This allowed Wawa to establish a sufficient number of locations to justify the support infrastructure necessary. It also allowed the company to have strong brand presence in the market."
The brand presence was helped because the Wawa name, while new to Florida, was not completely unknown there. Florida is home to many transplants from Wawa's home base who remember the chain fondly.
"The [Florida] market already has many people who knew the brand," Montgomery says. "Whether these are snowbirds, residents who had moved to Florida or vacationers, many of these people missed 'their' Wawa and were advocates of the brand."
This advocacy was based at least in part on Wawa's reputation for good food, by convenience-store standards. In a recent study by Market Force Information, Wawa received a top-rated "composite loyalty score" of 68 percent, due largely to its fresh food offerings, including made-to-order hoagies (the preferred Northeastern term for submarine sandwiches) and breakfast sandwiches.
"Wawa is perhaps most famous for its build-to-order items including hoagies," Montgomery says. "What allows then to do this at a reasonable cost per items it the tremendous volume that they make. The kitchen staff is extremely proficient at making custom sandwiches."