January 28, 2009
Wawa Cleans Up for the Recession
When the
going gets tough, Wawa gets going. While retailers of various box sizes
have engaged in large-scale store closings and layoffs since the recession
hit, the Media, Penn.-based convenience store chain chose a different path
when it first spotted the economy turning downward in 2007.
Harry McHugh,
senior vice president at Wawa, told CS News Online, "We’ve
been through this many times before and know we are left to our own devices.
We knew what we should do: cut expenses and make sure the balance sheet
was in order, and be prudent in investments."
Wawa’s prudent
approach meant putting off any rapid expansion plans and looking to control
costs without compromising service and the customer experience.
"We
certainly don’t want to cut customer service," Mr. McHugh told CS
News.
"It’s foolish to do that by cutting labor costs. These types of economic
downturns are a test of your commitment to customer service and an opportunity
to provide a value."
To keep costs
under control, Wawa has put off numerous projects that were ready to go.
One area where it did not skimp was in store remodels.
"The
stores have to remain world-class. If people are unhappy with the product,
they won’t shop in our stores, no matter what your customers service is," said
Mr. McHugh.
"We
have increased our investments in those areas (store remodels) and are
revitalizing at least half the chain in 2009," he added.
Wawa also
remained committed to its employees at a time when those at other companies
are uncertain about their jobs and future prospects.
"You
just can’t say, ‘I’m not offering you benefits now.’ If anything, we are
going the other way, offering more benefits and tuition refunds and a greater
choice of benefits to more customer service staff," Mr. McHugh said. "We
would never skimp on employee education or development. We have also raised
our level of pay, but made it more merit-based. When you start exercising
common sense, what you cannot compromise on becomes even clearer."
Discussion Questions:
What do you think of Wawa’s approach to management during an economic
downturn? What are key insights from how Wawa runs its business and how
does that apply to others in retailing or other fields?
BrainTrust
Recent Discussions
Discussion Questions
Poll
Wawa is an example of company that focuses on being consumer-centric and cutting costs. They will continue to be formidable competitors.
Way to go Wawa! This C-store chain shows us that you can capitalize on a recession. Rather than crawling under a rock or cutting jobs as a knee-jerk reaction, they are building their business. And when they come out of the recession, they will be stronger, more agile and better equipped to serve consumers. There is a valuable lesson to be learned here. Are other businesses listening?
During this downturn, the common reaction is panic. In the panic, we are missing some great and long-lasting opportunities in retail. The chains that really connect to their customer are the ones that will emerge stronger. It is all about the customer now. We are back to a buyer’s market and their spending habits will determine who wins and who loses.
I do know a lot about Wawa but this is the direction I like to see. Investment in the units that actually bring in the money. The About Wawa page at wawa.com clearly identifies their core values which are very customer friendly. During this time, customers are looking for a little love and it looks like Wawa is serious about that so I say go for it. You can always eat your competitor’s lunch (or breakfast sandwich in this case) by offering an edge to your customer.
Wawa’s strategy shows a laser sharp focus on what matters most to the most important constituencies in retailing. The best stores and the best service for customers–and the best incentives to stay with Wawa and deliver that service for employees.
A pretty good strategist once said “the essence of strategy is the reduction of complexity to simplicity.” Sounds like someone at Wawa heard the same speech–and listened.
Wawa has the only convenience stores I have actually gone out of my way to visit. The configuration, product assortment and, yes, the customer service are all excellent. So it’s no surprise to me or anyone who travels around southern NJ, Pennsylvania and Delaware that they are aggressive during this downturn.
Wawa has not buried it head in the sand and has not hidden from the economic downturn. They have cut costs where it made sense and are spending money where it will give them the greatest return.
Great move and a great company who is living its values.
About seventeen years ago a Towers-Perrin brochure, of all things, rocked my world with the concept that how we treat our people is exactly how they are going to treat our customers.
Add that to the notion that the most important thing we need in any economy–but especially a recession–is happy customers, and the thing we must do is find and keep more and more of them, and I think Wawa has a formula that’s going to see them through this economy and the next…and the next.
Just think: If more of the rest of us had taken that attitude more of the rest of the time, where would our global economy be now?
Bravo Wawa! Retail survivors will be focused on the customer. That means not only giving the customer what they want when they want it, but also making the investment in associate hiring and development. Well trained and focused associates help customers buy. It’s retail 101.
Wawa has been a leader in the c-store industry for some time based on an overriding principle – provide good customer service (with all the elements that can encompass). They’ve also understood that if you want to do that, you have to have good people, and to do that, you need to treat your people good.
Unlike some companies, in this and other industries, they do not see their people as an expense, but rather as a resource. This viewpoint is part of their culture.
If you want an example of what happens when you take the opposite view, look to what has happened to Circuit City. While it is overly simplistic to lay all the blame for its demise on the decision to terminate its experienced sales staff and replace them with a lower cost newly hired and inexperienced sales staff, it certainly played a strong role.
Its people is one of the reasons Wawa is a game changer when it enters a market. Wawa “repositions” the competition out of the customer’s consideration set. It’s why the phrase “my Wawa” becomes part of the lexicon in its markets.
Wawa has always done things “right” and it was nice to see that even though I’m now out of their market, they’re still doing it right! Everyone could learn from their model!
I’d expect this of Wawa. Good, smart management. No rocket science here, just a willingness to look the big picture in the eye with patience and fortitude. While we’re on quotes about dealing with hard times, let me paraphrase Sam Walton, who said something like “Never spend in good times what you wouldn’t in bad.” Now, if only America operated that way!
There are good reasons why good retailers continue to outperform their peers. While many companies claim to be consumer-centric, few “walk the walk.” Wawa is the exception, and their sustained performance over many years shows why this core value is a key element of their success. Others should take a lesson from this. Circuit City’s downfall was a direct result of management’s decision to fire their most experienced salespeople. It amazes me how few retailers really understand what customer centricity is all about.
Wawa is a fantastic company, so it isn’t surprising to see this from them. The idea of cutting expansion early is a great one. Too many retailers have gotten boxed in by over-expanding into this recession (back when people seemed to care less about the balance sheet), even though the US is over-stored by any measure. If the downtown continues long enough, even many of the good retailers that built too fast will face balance sheet issues as a result.
#1 recession opportunity for Wawa and any other well-run retailers: get new locations at bargain prices and renegotiate current rents downward. Commercial real estate owners are getting increasingly desperate. And building or renovating stores can be done for a lot less than 2 or 3 years ago, because construction contractors and fixture suppliers are even more desperate than landlords. Deflation creates profit opportunities.
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Wawa is an example of company that focuses on being consumer-centric and cutting costs. They will continue to be formidable competitors.
Way to go Wawa! This C-store chain shows us that you can capitalize on a recession. Rather than crawling under a rock or cutting jobs as a knee-jerk reaction, they are building their business. And when they come out of the recession, they will be stronger, more agile and better equipped to serve consumers. There is a valuable lesson to be learned here. Are other businesses listening?
During this downturn, the common reaction is panic. In the panic, we are missing some great and long-lasting opportunities in retail. The chains that really connect to their customer are the ones that will emerge stronger. It is all about the customer now. We are back to a buyer’s market and their spending habits will determine who wins and who loses.
I do know a lot about Wawa but this is the direction I like to see. Investment in the units that actually bring in the money. The About Wawa page at wawa.com clearly identifies their core values which are very customer friendly. During this time, customers are looking for a little love and it looks like Wawa is serious about that so I say go for it. You can always eat your competitor’s lunch (or breakfast sandwich in this case) by offering an edge to your customer.
Wawa’s strategy shows a laser sharp focus on what matters most to the most important constituencies in retailing. The best stores and the best service for customers–and the best incentives to stay with Wawa and deliver that service for employees.
A pretty good strategist once said “the essence of strategy is the reduction of complexity to simplicity.” Sounds like someone at Wawa heard the same speech–and listened.
Wawa has the only convenience stores I have actually gone out of my way to visit. The configuration, product assortment and, yes, the customer service are all excellent. So it’s no surprise to me or anyone who travels around southern NJ, Pennsylvania and Delaware that they are aggressive during this downturn.
Wawa has not buried it head in the sand and has not hidden from the economic downturn. They have cut costs where it made sense and are spending money where it will give them the greatest return.
Great move and a great company who is living its values.
About seventeen years ago a Towers-Perrin brochure, of all things, rocked my world with the concept that how we treat our people is exactly how they are going to treat our customers.
Add that to the notion that the most important thing we need in any economy–but especially a recession–is happy customers, and the thing we must do is find and keep more and more of them, and I think Wawa has a formula that’s going to see them through this economy and the next…and the next.
Just think: If more of the rest of us had taken that attitude more of the rest of the time, where would our global economy be now?
Bravo Wawa! Retail survivors will be focused on the customer. That means not only giving the customer what they want when they want it, but also making the investment in associate hiring and development. Well trained and focused associates help customers buy. It’s retail 101.
Wawa has been a leader in the c-store industry for some time based on an overriding principle – provide good customer service (with all the elements that can encompass). They’ve also understood that if you want to do that, you have to have good people, and to do that, you need to treat your people good.
Unlike some companies, in this and other industries, they do not see their people as an expense, but rather as a resource. This viewpoint is part of their culture.
If you want an example of what happens when you take the opposite view, look to what has happened to Circuit City. While it is overly simplistic to lay all the blame for its demise on the decision to terminate its experienced sales staff and replace them with a lower cost newly hired and inexperienced sales staff, it certainly played a strong role.
Its people is one of the reasons Wawa is a game changer when it enters a market. Wawa “repositions” the competition out of the customer’s consideration set. It’s why the phrase “my Wawa” becomes part of the lexicon in its markets.
Wawa has always done things “right” and it was nice to see that even though I’m now out of their market, they’re still doing it right! Everyone could learn from their model!
I’d expect this of Wawa. Good, smart management. No rocket science here, just a willingness to look the big picture in the eye with patience and fortitude. While we’re on quotes about dealing with hard times, let me paraphrase Sam Walton, who said something like “Never spend in good times what you wouldn’t in bad.” Now, if only America operated that way!
There are good reasons why good retailers continue to outperform their peers. While many companies claim to be consumer-centric, few “walk the walk.” Wawa is the exception, and their sustained performance over many years shows why this core value is a key element of their success. Others should take a lesson from this. Circuit City’s downfall was a direct result of management’s decision to fire their most experienced salespeople. It amazes me how few retailers really understand what customer centricity is all about.
Wawa is a fantastic company, so it isn’t surprising to see this from them. The idea of cutting expansion early is a great one. Too many retailers have gotten boxed in by over-expanding into this recession (back when people seemed to care less about the balance sheet), even though the US is over-stored by any measure. If the downtown continues long enough, even many of the good retailers that built too fast will face balance sheet issues as a result.
#1 recession opportunity for Wawa and any other well-run retailers: get new locations at bargain prices and renegotiate current rents downward. Commercial real estate owners are getting increasingly desperate. And building or renovating stores can be done for a lot less than 2 or 3 years ago, because construction contractors and fixture suppliers are even more desperate than landlords. Deflation creates profit opportunities.