Wawa feels America's uncertainty and offers 'sense of comfort' as customers spend less
Published in Business News
Wawa chief executive Chris Gheysens says he’s no “rock star CEO.” He’s busy enough trying to expand the Pennsylvania-based convenience store chain to a more national audience, without making himself a familiar figure on Instagram or cable news.
But even while preoccupied with challenges like regulars visiting his 1,100 stores a little less and acting frugal when they do, Gheysens twice this month took time to sit with Philadelphia-area business crowds. He told them how he’s trying to reassure 47,000 employees and nearly 2 million daily customers seeking gas and hoagies in the face of rising prices, falling stocks, political conflict, and other social-media-fed worries.
“This uncertainty of the last 18 months has affected consumer behavior,“ Gheysens told a hall full of Chester County, Pennsylvania, business leaders and a panel of fellow CEOs in West Chester on March 14. ”Inflation affects confidence. It affects spending. I might have gotten a large; now I get a small. I might have come in three times a week, now it’s twice.
“For us as a brand, we need to make sure people who come into Wawa feel better. We want people who walk into Wawa to have a sense of calm, a sense of comfort.”
Most customers spend three to five minutes at Wawa. “We strive to make it the best three to five minutes of someone’s day. A lot has to go right,” Gheysens told corporate HR chiefs and technologists at hiring-software maker Phenom’s Philadelphia conference on March 11.
Employees as stockholders
Wawa is a private company operating in nine states. The Woods family controls the board, but 40% of shares are in the hands of employees through a company-funded employee stock-ownership plan (ESOP) that functions as a retirement program. Because of that, Wawa enjoys a little extra flexibility compared to stock market-listed retailers with millions of investors. Owners and executives of private companies, Gheysens noted at both talks, can decide to absorb losses in the short-term, if it helps gain customers or retain staff.
“We can go into new markets and lose money for a number of years,” he told the Philly crowd. “Goldman Sachs did an analysis. They looked into our financials and said, ‘If you were public, you couldn’t lose that much money.’ I walked away and thought, ‘That’s a competitive advantage.’”
In early March, Gheysens went to Washington to meet new members of Congress and talk about Wawa’s business, as spokesperson Lori Bruce put it.
The company has used its political leverage before. Wawa, Wegmans, and Gore-Tex were among the family companies that prevailed on President Barack Obama to sign a 2012 law loosening public financial reporting requirements for large private firms that are partly owned by employees, which also give owners tax advantages.
Employee stock is another advantage in the crucial field of recruitment and retention in the traditionally high turnover retail field, Gheyens said.
“If you work for Wawa 20 years — my attorneys hate for me to say it — you’ll have an annuity another 25 years, at almost that level” of your former pay, he said.
Wawa looks to store workers as its future management pool. “Over 90% of our store leaders are internally developed,” he said. “We seed stores with new leadership teams. It’s one of the magical things we do.”
He cited the example of two Florida store workers — a married couple — who are moving to Kentucky to open the first Wawas in the Bluegrass State. It’s a move up in more ways than one: Since Kentucky is more affordable than Florida, he said, “it’s the first time they can afford a home of their own.”
Gheysens, a graduate of Catholic schools, spoke positively about the Woods’ Quaker heritage and egalitarian style. He said Wawa embraces the concept of “servant-leadership” developed by the late Quaker engineer and management theorist Robert K. Greenleaf of Kennett Square, and its deep impact on Wawa’s “community” culture.
“We have a building dedicated to servant-leader training,” he said. “This is directly tied back to the Quaker legacy.”
He’s pleased when visitors to Wawa meetings get confused about who’s a manager and who’s a store employee making suggestions and observations. He gave examples to the West Chester crowd: “We have these ‘clutches,’ or sleeves for the coffee cups, so that you don’t burn your hand. A good brand manager would say this should say Wawa. They usually do.
“But in (one New Jersey Wawa) the sleeves all had writing: ‘If you are grouchy, don’t take it out on other people. Spread kindness.’ The other side says ‘Go Birds!’ ”
That store manager takes the clutches to the local elementary school so students can adorn them with positive messages.
“We are not trying to be your religion. We are not trying to be your family,” said Gheysens. “We’re telling you there’s a fifth grader out there with a perspective that would probably be good for you to have.” He credited the manager for “an unexpected level of care” that fit “our culture.”
The company uses behavioral scientists to test candidates “who give people a warm embrace,” as future leaders. “You would be amazed, the (discomfort some) have with front-line people. Sometimes they won’t talk to them. That doesn’t work here. You need to respect people, no matter the title.”
Hoagies to quesadillas
These days Wawa is well known for selling hot food and sandwiches ordered through apps and store kiosks — a far cry from 1970s Wawa stores where clerks cut ham and salami in-house and sold individual rolls so customers could make their own hoagies.
He said he urges workers not to fear the latest automation, self-improving “artificial intelligence” software. “Every time a customer has to call an 800 number to get something is an opportunity to show AI can help power associates to do it better. It’s about enhancing their ability, not replacing their ability.”
In West Chester, Gheysens offered some general advice: “Sheetz is looking at a site less than a mile from here. Don’t go there,” he deadpanned.
And, when at Wawa, he said, “Go for the chicken cheese quesadilla. It’s a sleeper, folks!”
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