10 Billion Wives Shy

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Now Wawa's semi-retired chairman, Wood was the second and longest-serving chief executive of a four-CEO company, one that has weathered 54 years of family in-fighting, recessions, and several failed expansion attempts. Wood kept Wawa private, but also started handing it off to non­-family leaders more than a decade ago, betting the best way to ensure Wawa's future was to separate it from its founding family. His wager paid off.

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Wawa is still aggressively growing: It now has almost 800 locations­-none franchised-and 30,000 employees in six states (plus Washington, D.C.). After decades of pushing cheap gas and cigarettes and made-to-order sandwiches to suburban crowds, Wawa is starting to de-emphasize two of the three. The current CEO, Chris Gheysens, is swapping in Tesla charging stations, kale salads, and small-batch coffee, most of which customers can order on their phones (or Wawa's ubiquitous touchscreens). Gheysens calls this Wawa's 'barbell' strategy: continue to offer the cheap staples that attracted longtime customers, while expanding into cities as the newest health-conscious, gourmet-inflected, casual-lunch option.

Soon enough, we became acolytes, won over by last-minute groceries and better-than-average coffee; my brothers, both now living far from Wawa outposts, still swear by its hoagies and breakfast sandwiches. But Wawa transcends local celebrity.

'On their best day, most of the sub chains can't top, for example, Wawa's tuna hoagie on whole wheat,' Food & Wine recently. 'Heaven, for a few bucks.'

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This year, Wawa achieved another level of pop-culture fame: During a pre-Super Bowl on Saturday Night Live, Tina Fey hoisted a basketful of Wawa hoagies to proclaim her Philly pride. And, like any all-night restaurant, the chain is always there to make fresh sandwiches for the closing-time crowd. 'I feel like I should be too old to be winding up in Wawas at 1 a.m.,' one friend, a thirtysomething Wharton MBA student, recently sighed. It's not just the sandwiches that win notice. In 2005, Harvard Business Review Wawa's rigorous employee training and the resulting strong customer service culture.

That training through a proprietary program with Philadelphia's St. Joseph's University; the company now handles training on its own. 'Nowhere else in my daily life does anyone hold open the door for me, except in a Wawa,' says Ronald Dufresne, a management professor at St. Joseph's who worked on that program. 'In a Wawa store, people are nice to each other.'

Like Wegmans or In-N-Out, Wawa is usually described as a, a regional player-a Mid-Atlantic specialist confined to a narrow niche. That niche, though, is huge. The company claims $10 billion in annual revenue. (Wawa also says it's profitable, though it won't discuss specifics or how much revenue comes from gas sales.) Top dog in the U.S. Convenience store industry is 7-Eleven, which took in $29 billion in U.S. Revenue in 2017.

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But Wawa is now eyeing new competitors: quick-service and fast-casual chains like Dunkin' Donuts or even Chipotle, which sells nearly $4.5 billion in burrito bowls and guacamole annually. 'They do a great job,' says Bonnie Riggs, a restaurant analyst for NPD Group, who calls Wawa one of several 'food-forward' convenience stores; others are Wawa's in-state rival Sheetz, Baltimore's Royal Farms, and Tulsa's QuikTrip. All seek to compete with the 'quick-service restaurants' that make up one of the fastest-growing and most-competitive segments of the restaurant industry. High-end chefs are fast-casual concepts; startups focused on salad and burgers and poke all vie to be the next Shake Shack; fast-food behemoths like McDonald's and Dunkin' Donuts are ingredients; grocery stores with prepared-food sections are becoming '.'

Yet while it tries to level up, Wawa's business still relies on volume and speed. The company makes 'very few partial pennies per customer,' Gheysens says, 'but for a lot of customers'-800 million of them annually.

Bring people in for a cup of coffee or a tank of gas or to get cash at the store's fee-free ATMs, and they'll likely buy something else: a bag of chips, a Tastykake, a highly customized hoagie-or, since the prices are so low, all of the above. (An average convenience-store customer spends $4.12, according to NPD; Wawa says theirs spends $7.42.). Wawa's ability to sell so much so quickly relies on technology, tightly controlled supply-chain operations, and a 'cluster' expansion strategy that establishes most new stores near other Wawas. The company introduced in 2002, getting a decade-long jump on the iPad menus that many fast-casual restaurants now use (reducing labor costs and making customized orders-and upselling-much easier). Its distribution partner, McLane, runs what Wawa calls the supplier's only dedicated warehouse in the U.S., in New Jersey.

Last year, Gheysens oversaw the launch of an oil barge and tug to bring 7.8 million gallons of gas from the Gulf of Mexico to Florida stores three times per month. The barge up to $80 million. Given splurges like that-and the average $6 million per store Wawa is spending to open hundreds of Florida locations and establish itself in the of Washington-it's a little astounding how cheap Wawa remains. Gheysens laughs, a little pained, when I mention a recent $10 Wawa dinner - including snack, drink and dessert - purchased in a part of D.C. Not known for cheap eats.

'We largely do not have a different urban pricing strategy,' says Gheysens, who's spent most of his 21 years at Wawa in accounting and finance. 'Consistency is really important to our customers.' For the first 300 years or so, that was a Wood. Wawa was nominally founded in 1964, when Grahame Wood opened his first market in a rural suburb. But it really dates back to 1902, when Grahame's grandfather George Wood opened the Wawa dairy farm, which would eventually supply that store. And to 1803, when George's uncle David C. Wood opened the first of the New Jersey iron foundries that would eventually provide the capital to buy the dairy.

And to 1682, when the first Richard Wood came from England to colonial Philadelphia (at the same time as fellow Quaker William Penn) and started building a dynasty. It went on to encompass textile companies, children's hospitals, the Pennsylvania Railroad, the Philadelphia Bank, and a dry goods business that, in the late 1830s, outsourced some debt-collection work in Illinois to a young lawyer named Abraham Lincoln.

Dick Wood spent the 1980s and 1990s expanding Wawa's product lineup beyond dairy and deli meats, gradually transforming Wawa from quasi-grocery to sandwich shop. His early attempt at selling gas flopped; the second, in 1993, succeeded, ushering in what Gheysens calls the era of 'big gas' and suburban-focused expansion. 'You have to give them credit for having a really good business, but not standing pat, and incrementally changing to comport with how the customers are changing,' says John Stanton, a food marketing professor at St.

Joseph's who's consulted for Wawa. Half a mile from the renovated Wawa's celebrations, at a larger, newer Wawa with gas pumps outside and tables out back, training general manager Denise Haley is overseeing operations. A cheerfully competent presence with carefully plucked eyebrows and long brown hair, Haley walks me through industrial kitchens, past cold cases full of energy drinks and a freezer holding Halo Top and Wawa ice cream.

She greets colleagues and customers without breaking stride, and then throws a smile to the visiting cigarette sales reps. 'They pay us a lot of money,' she confides. Beyond the occasional book cameo, or an annual resort trip for top managers, Haley and other longtime employees have been well rewarded for their tenures at Wawa, thanks to the company's ESOP, which, by some accounts, is the second-largest in the U.S. This setup isn't without tensions; as Wawa's growth has accelerated, so have payouts. Wawa recently $25 million to settle a lawsuit from former employees that claimed that after they left, the company prematurely cashed them out of the ESOP.

(Wawa declined to comment.) That lawsuit, and a few others involving and claims at individual stores, point to another challenge: Wawa's labor force has increased dramatically in recent years. Wawa had 20,000 employees when Gheysens took over in 2013; it now employs more than 30,000 people-and 5,000 more in summer. Most of the heavy lifting happens at Wawa's gleaming new headquarters, in a 10,000-square-foot test kitchen populated by chefs, nutritionists, food scientists, and beverage specialists. One recent day, an employee offers tastes of the sesame-seed hoagie rolls she's rigorously comparing, before Wawa's beverage expert walks me through a small-batch 'cupping,' the coffee snob's sniff-slurp-spit equivalent of a wine tasting. Meanwhile, two chefs study an array of chickpeas, scallions, and lemons, ready to experiment with a 'green tehina' sauce that, one admits, 'is a bit out there for our customers.'

Which has paid off handsomely for longtime employees like Cheryl Farley, who started part time at Wawa in 1982. In April, she retired from the IT department at age 58-and promptly embarked on a busy schedule of birding trips around North America; cruising Alaska and the Caribbean; and visits to fellow Wawa retirees, some of whom built beach houses with ESOP earnings. 'Because of the ESOP, many recent retirees are doing things that many people would never dream of,' Farley says. 'I'm healthy, I'm young and I get to relax.'