While many companies - with airlines at the top of the list - are trying to be ever more inventive with ways to squeeze dollars out of their customers during tough economic times, Wawa Inc. is celebrating something it offers customers for free: access to their money at an ATM.
This month, someone will make the one billionth surcharge-free automated teller machine withdrawal at a Wawa, the company said. To mark the occasion, it is staging a parade Wednesday morning from LOVE Park to the Wawa at 17th and Arch Streets in Center City.
Wawa estimated that its ATMs have saved consumers $1.3 billion since their introduction in 1996.
"We have foregone what we consider to be significant revenues from these transactions," Wawa's chief executive, Howard Stoeckel, said Monday.
Brand-and-marketing experts said Wawa's maintenance of surcharge-free ATMs even during a down economy burnished the company's reputation for being focused on consumers' desire for convenience and value.
"It's kind of a small thank-you to your customers," said Steven Frumkin, an associate professor of business marketing and strategy at Philadelphia University.
Richard Lancioni, professor of marketing and supply-chain management at Temple University's Fox School of Business, said the ATMs built demand for other products in the stores.
In Stoeckel's mind, the ATMs add to Wawa's "reservoir of trust" with consumers, and "that has sustained us very well during what has been a very challenging economy," he said.
During the recession, Wawa, with $5.83 billion in annual sales according to the most recent Forbes magazine ranking of private U.S. companies, slowed its pace of store openings, but the company has been strong enough to invest in employees and infrastructure.
For example, while some companies cut health-care benefits during the recession, Wawa offered them to 7,000 additional employees; 1,000 accepted the offer. It also boosted the percentage of profits contributed to the employee stock-ownership plan to 15 percent, from 10 percent.
Last June, the company opened a leased fuel-storage facility in Wilmington to supply its stores, boosting its power as a gasoline retailer.
Now, Wawa is picking up the pace of store openings again, developing smaller stores to enable it to get closer to urban markets.
The company is willing to use 1.25-acre lots, down from the 2.5 acres typical for stores in the wide-open suburbs of South Jersey and Chester County. A new store might have six pumps serving 12 cars instead of the more typical eight pumps for 16 cars at a time. Construction of the first such "rightsized" store in Lower Nazareth, Pa., is scheduled to begin soon.
In the Roxborough section of Philadelphia, Wawa is opening a store as big as one typically seen in the suburbs, but on a site shared with a CVS.
Wawa has 572 stores now, just three more than it had at the end of 2007, but it plans to open 20 to 25 this year and the same number next year in its current market area of Pennsylvania, New Jersey, Delaware, Maryland, and Virginia.
"Eventually we will need a new Wawa land to expand," Stoeckel said. He said the company was about six months from making a decision about where to go outside the five states. "That will probably be the biggest challenge in Wawa's history," Stoeckel said.
At a Glance
The beginning: The company started in 1803 in New Jersey as an iron foundry and was incorporated in 1865 as the Millville Manufacturing Co., a textile business.
Wawa Dairy Farms: Started in 1902 in Wawa, Delaware County, by Millville's owner, George Wood, it specialized in home dairy deliveries.
Wawa Food Markets: The first store was opened in 1964 by Grahame Wood, George's grandson, in Folsom.
Headquarters: Wawa, Delaware County.
Stores: More than 570 in Pennsylvania, New Jersey, Delaware, Maryland, and Virginia.
Coffee sales: 195 million cups per year.
Hoagie sales: 54 million per year.
SOURCE: Wawa Inc.EndText