PhillyDeals: Wawa makes more plans to expand, this time to Florida

Wawa tries everything. Sonic-style drive-in booths and Panera-like sit-down tables didn't last. But centralized baking and store-built hoagies have been profitable, and Wawa Inc. is now the world's biggest hoagie-maker, or so says bread supplier Len Amoroso.

The 600-store, century-old, dairy-based, Delaware County-based Wawa chain has tried, and canceled, national taco, pizza, and doughnut concessions. It has tried bigger stores and smaller ones, before settling on 5,500 square feet as ideal for keeping people moving and reasonably cheerful. Half of Wawa's stores sell gasoline - it sold one in every 70 retail gallons in the United States in 2011 - from company-contracted storage tanks in the Port of Wilmington. Plus free air (for tires). Soon it will add espresso machines, at sub-Starbucks prices.

And, for the first time, Wawa is trying Florida, where it began work last year on the first of 50 stores it hopes will cater to hoagie-hungry expatriates and tourists by 2014.

It's a thousand-mile step for the $5 billion (yearly sales) company, whose current network sprawls from North Jersey to the Poconos to central Virginia.

Florida is "an underserved market," says Howard Stoeckel, Wawa's chief executive officer. "We feel the economy has bottomed. We'd like to be positioned as the economy grows."

Why not, say, Pittsburgh? "Sheetz country," Stoeckel says, citing the "respected" Altoona, Pa.-based chain. Carolinas? Already colonized by efficient, Tulsa, Okla.-based QuikTrip. Wawa won't do acquisitions. So "we're leapfrogging" to Orlando and Tampa.

Why grow at all? As a private company, it is 49 percent owned by the Wood family trust, representing descendants of Wawa's founders, a family with old South Jersey merchant and industrial roots. It is nearly 30 percent owned by an employee stock ownership program (ESOP), the rest by Wood family members and managers. Because of that, Wawa can set sales, profit, and growth goals. But even private owners expect rising profits, which means more stores, says Stoeckel, who started his career at Wanamaker's and admires Wegmans Food Markets Inc. and Southwest Airlines Co.

The slow economy makes it easier to hire and keep workers; turnover is down more than half, to about 40 percent annually. Land costs are also down. That makes growth easier: New Wawa openings have risen, from 10 to 12 a year in the late 2000s, to 20 last year, and a planned 28 this year, including the first seven in Florida.

Convenience stores like Wawa used to make their profits from soft drinks and cigarettes. Stoeckel says competition and consumer trends have cut their profit margins, though those items still bring people into stores.

Wawa has boosted margins from its fresh produce and snacks business and store-made sandwiches since the early 2000s, when it had Texas-based food distributor McLane Co. Inc. build a 220,000-square-foot terminal in Carneys Point. Wawa centralized its baking in Swedesboro, where it works with Pennsauken-based J&J Snack Foods Corp. to make its pretzels and other baked snacks.

Florida is too far for that, so "we will rely on local providers" for milk and other perishables, along with McLane's Florida distribution center, Stoeckel said.

Center City customers were annoyed by store closings in the 2000s. Stoeckel says the company is done shedding old-style small stores that "underperformed." Wawa plans to keep its 300 remaining non-gasoline stores open, though it's not adding more.

The newer stores, with their multiple-lane gas pumps, have provoked resistance from competitors and neighbors worried about traffic and trash. Easttown in Chester County and Conshohocken last year rejected proposed Wawas. Stoeckel says he will work with neighbors and try again. Big Wawas were welcomed in places such as Lower Moreland, which is trying to boost its tax base, at Philadelphia International Airport, and on Philadelphia's Roosevelt Boulevard, with help from what Stoeckel says was a welcoming administration of Mayor Nutter.

"Florida is looking for growth. They didn't used to need it. Now they (are) very receptive, and very helpful in getting us permitted," Stoeckel said.

Where else? Before Wawa grows further, says the boss, "we have to demonstrate we can get return for shareholders by migrating 1,000 miles south."