Still Relevant After All These Years

Don't tell Bill Weigel it's time to retire—he's doing just fine.

By  CSP Staff,

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The convenience store model is always changing. Innovations become standard. Food trends come and go. So how does an 82-year-old, privately held company stay at the forefront of the c-store industry? Weigel’s Stores chairman and CEO, Bill Weigel, chalks it up to one thing: being ahead of the curve.

William “Bill” Weigel, who is 75, repre­sents the fifth generation of a family that immigrated to America from Germany in 1847. Karl Augustus Weigel, Johanna Christiana Weigel and their two children first set up a farm in Wartburg, Tenn. They later moved to Knox County, where the couple’s grandsons, W. Walter and Arthur Weigel, bought 600 acres in Powell in 1918. This has been the family’s base of opera­tions ever since.

Weigel’s Stores Inc. is still a family-owned business, operating a dairy and 63 convenience stores throughout Knoxville, Tenn., and surrounding communities. Founded in 1931, Weigel’s offers milk, cof­fee, foodservice and gasoline via its verti­cally integrated distribution channel. The company employs more than 600 people and tallies annual sales of more than $400 million.

Bill Weigel has been at the helm for more than four decades, steering his company’s growth from a dairy with a few stores to the chain it is today. In calmer times, selling cigarettes out of a small cor­ner of the store was a key to solid profits. But retailing has changed, most notably in the past five or so years, he says.

For one thing, competition is crossing lines. “Drug stores and dollar stores sell cigarettes; even restaurants are offering more carryout food,” he says. And while he sees food sales as “the one thing we can do to possibly build any margin” to replace profits lost on cigarettes, consumer behav­ior has changed the inside of the store, too. “Eating is happening all hours of the day” and the level of competition even among c-stores has ramped up dramatically, he says. “Everyone is having to do a better job inside the stores.”

After years of slow and steady growth at two or three new stores a year, Weigel’s upped its game and began adding loca­tions more aggressively, building five or more each year to maintain prominence in the competitive Knoxville market. Weigel is proud of his company’s lon­gevity. After more than 80 years in busi­ness, “We are here to stay,” he says. “We don’t give up, and if you don’t give up, you win.” He’s also proud of his company’s repu­tation as a great place to work, and his family’s involvement in the business. Of his three children, his son Kurt has been with the company for nine years after a 10-year career in teaching and coaching. As director of recruiting, he also handles  customer questions or complaints. “They get a response from a Weigel,” his dad says. Weigel’s two daughters are married and live in other parts of the country but are active owners, attending quarterly com­pany meetings.

The company started an internship program this summer to begin involv­ing the next generation of Weigels. When any of his seven grandchildren (four girls, three boys) turns 16, he or she is eligible to apply for a two-week internship that also comes with funds to help with col­lege. “They have to write a letter and tell us why they want it,” Weigel says. His first grandson worked in a store this summer and couldn’t get enough. “He was sup­posed to be there nine hours a day, but he was always asking to stay longer,” his proud grandfather says.

Dairy Beginnings

Weigel’s began as a dairy farm in Powell, Tenn., during the Great Depression, when Bill Weigel’s father and uncle bought six cows and began delivering unpasteurized pints of milk in glass bottles door to door. By 1935, they had bought a second-hand pasteurizer—Knoxville’s first—and the company began delivering milk to homes in the community. The milk was hand bottled, and the bottles were hand capped.

An oft-repeated anecdote features young Bill teaching himself how to milk a cow tied to a sycamore tree, a painful process for both the boy and the cow. As a youngster raised on a dairy farm, Weigel was expected to absorb the family busi­ness, almost by osmosis. So he did. It was as if buttermilk ran through his veins.

Speaking of buttermilk, Weigel’s makes its signature product in small batches. That’s the secret of its unique flavor. The company uses a 500-gallon vat for each batch, which makes the buttermilk consis­tent and always fresh, according to presi­dent Ken McMullen.

Weigel attributes the product’s loyal fan base to the large popu­lation of people with German ancestry in east Tennessee. They’re “kinfolk,” he says. Weigel says buttermilk sales at his stores notched up more than 15% in 2013 com­pared with 2012. The Manhattan Project brought another kind of immigrant to east Ten­nessee. Forty thousand people flocked to Oak Ridge during World War II, providing a boost to the local dairy business. By 1956, Weigel’s dairy milked more than 400 cows daily and led the industry with an innova­tive aluminum irrigation system, the first of its kind in the area.

Hiring Seniors: Good Business

Post-war culture shifts kept more house­wives at work outside the home even after their husbands came back from overseas. The home delivery model was slowly dying, so Weigel’s was forced to innovate yet again. Hence the birth of the milk depot, a freestanding drive-thru store stocked with jug milk and a few other staples, for the convenience of customers.

Weigel attended one of the c-store industry’s first conventions in 1964. Based on what he learned from industry peers, he decided to extend store hours, opening at 7 a.m. and closing at 11 p.m. He also instituted a unique hiring policy, staffing his stores exclusively with retired men age 65 and older. This was Weigel’s brainchild, not something he learned at the convention. He described his staff of senior citizens as mentors rather than employees. He called them “Mister,” and they called him “Billy.”

“For them, it was a novelty, not a job, because nobody else would hire them. They’d been put out to pasture,” Weigel says. “These gentlemen were friendly, self-motivated and hard-working. They always arrived 10 minutes early and never missed a day.” Over the years, the innovations con­tinued, as Weigel’s milk depots morphed into actual c-stores. In addition to opening Knoxville’s first convenience store, Weigel introduced the classic ICEE brand of fro­zen carbonated beverages to the Knoxville market. This was ICEE’s first foray into Tennessee. In fact, it was ICEE’s first mar­ket east of the Mississippi. The frozen treat was exclusive to Weigel’s for 40 years.

Lucky and Smart

Weigel is an innovator, but he considers himself extremely lucky. In fact, he will be the first one to tell you he’d rather be lucky than smart. The way Weigel tells it, he wouldn’t have put in gas pumps in the first place if not for a lucky turn of events.

“A fellow came around and offered to install gas pumps in front of one of my stores,” he says. “I was very apprehensive. Didn’t want to lose the parking spots. I told him he could put ’em in as long as he agreed to take ’em out if I changed my mind. He agreed, and the rest is history.”

It was 1970 when Weigel’s installed Knoxville’s first self-service gas pumps. Weigel soon replicated the installation pro­cess and began putting the self-serve pumps in at all locations. “You gotta be awful lucky to go from lucky to smart. If I’d used my judgment, we wouldn’t have gas pumps right now,” Weigel says. “I was lucky to be sitting at the table with the ICEE people at a convention in Dallas way back when. I was lucky I listened to other people when we redesigned the prototype store in 1999. I didn’t much like the design—thought it looked too much like a gas station.”

Weigel pinned the drawing of the new store prototype to his wall and listened to his team praise it, despite his own reserva­tions. Over the course of six months, the design grew on him.

Tracking the Trends Bill Weigel’s formula for success is an uncommon work ethic, combined with foresight and, yes, some dumb luck. But don’t let him fool you; he’s plenty smart. Here’s what he sees in his c-store crystal ball: Consolidation: “There’s gonna be a lot of consolidation. It’s happening now with mega-chains,” Weigel says. “For us, we think that’s an opportunity, not a problem. Some of the best operators have fewer than 100 stores. The bigger they are, the more they’re bottom-line-oriented, not customer-oriented. Often the customer is the forgotten person.”

Weigel says he doesn’t intend to be a buyer or a seller, because all Weigel’s stores are built from the ground up. But customer service is what sets his stores apart from the competitors and builds success, he says. Weigel’s operates in a very competitive environment, with nearly 200 convenience stores in the Knox­ville market. Along with a very long list of independents, its top competitors include Pilot, MAPCO, Kwik Shop, Breadbox and Mr. Zip.

Flex Time: As Weigel’s workforce incorporates more millennials into its employee mix, the company is building in flexible schedules to accommodate the younger workers’ desire for work-life balance. It’s a decidedly different approach from the retired gentlemen who staffed the very first stores with structured schedules and predictable punctuality.

Electronic Cigarettes: With increased restrictions and social changes cutting into cigarettes, Weigel’s has embraced electronic cigarettes, which now make up 0.5% to 1% of his stores’ total cigarette sales, and growing.“Electronic cigarettes are the wild, wild West of tobacco products,” Weigel says.

Compressed Natural Gas: Weigel also anticipates new petroleum products, such as compressed natural gas (CNG), becoming an inevitable part of his product offering. “We’ll be rolling over into new fuel products, compressed gas, natural gas,” Weigel predicts. “We’re not sure what kind of equipment above and underground it will take. We’re still 15 to 20 years out, but we’re already testing new products to get in on the ground floor. Introducing CNG outlets is a $700,000 installation process for one outlet with two pumps. Prototypes are out there.” It’s that spirit of embracing the future that has been Bill Weigel’s way for more than 50 years.

“Cutting edge is where you gotta be,” he says. “Can’t wait till it happens.”

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