TAMPA, Fla. -- Circle K, 7-Eleven and other convenience stores will feel the squeeze when Wawa expands into the Tampa Bay market in Florida, said The Tampa Bay Times. But so will McDonald's, Subway, Starbucks, Panera Bread and drug stores. "We compete with everyone,'' Howard Stoeckel, CEO of the Pennsylvania-based convenience chain, told the newspaper.
After opening six stores in the Orland market this summer, Wawa is also planning to open five stores in the next few months and up to 100 stores in the Tampa Bay/Orlando market within five years. Thorntons, a Kentucky-based convenience chain, is opening stores in Clearwater and Tampa next month and up to 20 more in the next three years.
The chains will make the local c-store market even more competitive, Steven Montgomery, president of Lake Forest, Ill.-based consultancy b2b Solutions told the paper. 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 added. "It may be a case of being the best of the rest.''
Montgomery said that he expects that 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 gasoline, 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. 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 there from the North, said the report. It helped that the Sunshine State already has lots of transplants loyal to their brands.
Wawa is a chain of more than 595 convenience retail stores (300 offering gasoline), located in Pennsylvania, New Jersey, Delaware, Maryland and Virginia and Florida. It is based in Wawa, Pa.
Thorntons, based in Louisville, Ky., operates 165 gasoline and convenience stores, car washes and travel plazas in five states: Kentucky, Illinois, Indiana, Ohio and Tennessee.
"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. … Consumers are looking at us not as a convenience store. They are perceiving us as a foodservice 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 sold in a "beer cave,'' the paper said.
7-Eleven has 185 stores in the Tampa Bay area and expects to open 15 more next year, the report said.
The Dallas-based chain 7 differentiates itself from others with its private-brand labels, value pricing and product selection, spokesperson Margaret Chabris told the Tampa Bay Times, although she would not comment directly about Wawa and Thorntons.