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By Barbara Grondin Francella
"From cannonballs to meatballs" is the way Wawa Inc. CEO Howard Stoeckel describes the company's history. With roots as an early 1800s iron foundry, Wawa branched out into textile mills, then dairy processing, which led to the opening of its first convenience store 45 years ago.
When Grahame Wood opened the doors of that first Wawa store April 16, 1964, in Folsom, Pa., customers found fresh produce, meat and other perishables. Fast forward to 2009 and the operator of more than 570 c-stores is a well-recognized industry leader selling fresh-cut fruits and vegetables, built-to-order hoagies, Wawa-brand dairy products and scores of other private label items. View a year-by-year timeline of Wawa's history.
"The anniversary is a time to step back, reflect on our growth and where we are today," Stoeckel, a 22-year-veteran of the company, told Convenience Store News in the midst of The Year of Wawaversaries, a series of 45 celebrations of store milestone anniversaries.
"We clearly are living through very unusual, unprecedented times," said Stoeckel during a recent sit-down with CSNews prior to a 25th Wawaversary celebration at the Wawa store in Somer's Point, N.J.
"Life a year ago was very different than it is today. People are nervous because they haven't lived through times of this nature. I think it's a time for tradition and trust -- which is what our 45th anniversary is all about -- reflecting on what we do so well, and making sure we continue to deliver that unique experience people have grown up with. Today especially, people fall back on things they feel comfortable with, things that have been part of their life for an extended period of time."
Stoeckel thinks with customers hurting, it is important for Wawa to focus on renewing the special attributes of the Wawa brand. "We can go through tough economic times and dig deep into the essence of the brand and the company," he said.
Wawa stores, which now are spread geographically throughout Pennsylvania, New Jersey, Delaware, Maryland and Virginia, feature a large fresh food selection, including hoagies, wraps, breakfast sandwiches, ready-to-eat salads and award-winning coffee. The average Wawa stocks more than 6,000 products, including Wawa-branded enhanced water, soda, juice and teas, along with bagged candy and trail mixes. The chain features no-surcharge ATMs, and more than 250 stores sell gasoline.
Last year, 400 million plus customers purchased more than 195 million cups of coffee, 54 million hoagies, and more than 110 million bottles of Wawa-branded dairy products, juices and teas. But those numbers don't give a full picture of Wawa's success, which as Stoeckel noted, is built on the company's unique bond between store associates and customers, and their dedication to the brand's values: Value People, Delight Customers, Embrace Change, Do the Right Thing, Do Things Right and Have a Passion for Winning.
When asked what Wawa's special attributes are, Stoeckel is quick to respond, "Clearly, our people."
"A few years ago, when we did customer focus groups, people told us they liked our products and how convenient we were. But more often, they noted our people," he noted. "They said our associates like each other, and they get caught up in the fun. We like to say we are the 'Cheers' of the c-store industry, a place where everybody knows your name. We want to make Wawa a place that is comfortable. Why else would someone get up on a Saturday morning in the winter, and come out for a cup of coffee? It's the experience."
Stoeckel credits the chain's general managers with hiring the right people and keeping them focused on Wawa's core values.
"The general managers are the most important part of our business," the CEO said. "I work for them. The leadership team is here to provide financial and people resources, and an overall strategy, but we need to support the mangers and get out of their way, so they can deliver this unique brand experience a half-million times a year."
Stoeckel said his priority is to nurture Wawa's values, "which have sustained us through 200 years, though the Depression, through recessions," he noted. "We talk constantly about those values and then we hire for those values. Our store associates are tremendously diverse, but when you ask them why they are working here, it relates to our values. They like people, they like to be part of the community, and they like to do things right."
That personal touch has been protected, in part, by Wawa's growth strategy, charitable work at the local level and employment strategies, which include hiring disabled workers and people who share Wawa's values, said David Johnston, Wawa's COO.
All but 85 of Wawa's stores are located within 100 miles of the corporate office, in Wawa, Pa. "The leadership team is in the stores," Johnston said. "In Virginia, our newest market, where we've been for 10 years, we are now feeling like a part of the community."
All About the Customer
"It sounds simple, but it really is all about the customer and the daily interchange between the customer and the associate," said Johnston.
Indeed, most of the stores' associates have been customers, he said. "I've had associates tell me going to Wawa was the best part of their day, and they wanted to be a part of the team," Johnston said. "They like the stores' spirit, sense of humor and culture."
What's more, many general managers began as local entrepreneurs. They've brought their desire to be a part of their community to Wawa.
"I'm proud we've been able to attract or develop people with an entrepreneurial spirit who are passionate about customer service," Johnston said. "It's the job of our support services to serve our stores and simplify their lives to ensure our general managers are free to concentrate on running their store and continuing to be entrepreneurial."
Wawa has a Key Partner Review Program that measures the performance of "internal and external vendors." Twice each year, Wawa general managers and store teams rate the performance of internal departments, such as the call center and marketing department, as well as outside vendors. "The survey measures how our general managers feel the departments and vendors are performing in terms of providing them with what they need to do their job," Johnston said. "More than 97 percent of stores participate. In general, scores are very high for both internal and external partners."
Still, when it comes to running a multi-million dollar enterprise, "retail is detail," the COO said. To that end, Wawa is using an advertising tagline from the early '80s -- "We do it just a little bit better" -- to communicate its mission to store-level associates.
"We strive to improve everything just a little bit all the time and not necessarily reach for the fences," Johnston said.
For example, Wawa's new G.R.E.A.T customer service program -- which stands for Greeting, Responsiveness, Eye contact, A smile and Thank you -- is a fundamental concept, he said, "but if you do each of those things just a little bit better and every time -- that's a big deal."
A constant goal for Johnston is simplifying the job of the associate. "Providing great service shouldn't take heroic acts," he said. "How do we make sure associates aren't stressed out about maintaining a piece of equipment that is hard to maintain or keeping a product that is always out of stock, in stock? It's hard to give customer service if you are unhappy, feel mistreated or are concerned about something else."
All this talk about nurturing and empowering associates sounds great, but many retailers mouth similar philosophies. Wawa walks the walk. The company invests a great deal in professional development for store-level associates, an area it has not cut back on during the tough economic times.
Also, Wawa's Goose Bumps program rewards store associates for going above and beyond to satisfy customers, Johnston noted. Managers and others hand out scratch-off cards carrying rewards points to associates who are caught doing something right. Points are accumulated in an online account and can be used for Wawa gear (shirts, sweatshirts, sling bags, etc.) and other prizes, such as iPods. "It's not about the prizes, really," Johnston said. "It's about being recognized. They did something special and someone noticed."
Some 8,000 associates who work at least 1,000 hours a year participate in Wawa's employee stock-option program (ESOP), making them part owners of the company. Today, store associates own 28 percent of Wawa.
In its yearly Values Challenge survey, all 17,000 associates are asked to evaluate the company's performance at meeting its core values. "They respond quickly and in high numbers," Stoeckel said. "We take that feedback very seriously. We talk openly about how we scored in areas where we did well, where we did OK, and where our people are telling us we need to do better."
The Year Ahead
For 2009, Wawa holds three major objectives: Meet the company's operating plan, improve the score on the Values Challenge survey, and position the company for the long term with new programs and initiatives. "We communicate those goals and give ourselves a report card, which is shared with all of the associates," Stoeckel noted. "Transparency is very important."
The company is holding regional town hall meetings with representatives from each store, so some of the associates' concerns can be addressed on a local level, Johnston added. "Some issues are global. Perhaps associates want to understand better how decisions are made. But some issues, such as a concern about favoritism, like someone getting better hours, can only be solved locally."
These efforts have clearly paid off. In last four years, Wawa has cut its associate turnover rate by more than 50 percent. It's common to find stores with associates serving 10, 15 and 20 years.
"We're on track to be better [on turnover] this year," Johnston said. "The economy, our better wages and benefits for anyone working 34.5 hours a week are obvious factors. But we've also focused on turnover."
Other factors, of course, contribute to Wawa's success. An important one, Stoeckel said, is the company's status as a privately owned company. "We can take a long-term view and don't have to compromise for the short term, as so many public companies do. If we were publicly traded, I'd have whiplash marks constantly, because we'd get beaten up about our stock price. Our stock price changes just once a year, so we have great stability."
Another hallmark is the retailer's constant innovation, which is spurred by its willingness to fail. "I look at my own career and I've failed many times on many initiatives," Stoeckel said. "I championed Pizza Hut and Taco Bell in our stores. We put in more than 100 Pizza Huts and Taco Bells -- and we took out more than 100 Pizza Huts and Taco Bells. But that experience made us value the Wawa brand more. Customers told us they didn't need branded fast food here. If they wanted it, they'd go to a branded fast feeder."
More recent not-so-successful initiatives included drive-in stores in Virginia and a service that would allow customers to text message their food orders to the store. "When we fail, it tells us that customers love what we already do and it brings our focus back to the fundamentals of the business," Stoeckel said. "If you don't take risks, you don't embrace change. When you learn from your mistakes, you are more willing to take risks."
Stoeckel summed up Wawa's immediate future by looking to its past. "It's about history and tradition. We've been there for customers in good times and in difficult times. Companies that have built up a reservoir of trust will fare better than those who haven't."