Wawa's first push into Morris County immediately upped the ante for Quick Chek, a rival c-store chain with 10 stores in the county.
"It's a very competitive [image-nocss] industry," Steve Montgomery, a retail consultant with Lake Forest, Ill.-based b2b Solutions LLC, told the newspaper. "Part of the reason is there's not a lot of product differentiation--until you get to into the food."
Quick Chek and 7-Eleven are also taking advantage of the recession-battered real-estate market and the strength of their balance sheets to finance, at favorable terms, new stores and their own pursuit of market share, the report added.
As the companies battle it out for business, it also becomes clear how convenience stores have evolved from selling cigarettes and sodas to something much more--a store that is part delicatessen, part grocery, part gas station.
During the past year, 7-Eleven added 31 stores in New Jersey alone, targeting urban areas and opening one location at Newark Liberty International Airport. Wawa opened a dozen new stores, including Parsippany, and Quick Chek added three stores in Bayonne, South Brunswick and Manchester.
Neil Stern, a senior partner at retail consulting firm McMillan Doolittle in Chicago, said most retailers grow by squeezing all the profits they can from a store and, simultaneously, adding new ones. Still, even Stern said he was struck by how the c-stores are multiplying in certain parts of the country, including New Jersey.
The rapid spread of stores, he told the paper, is a "Northeast, Mid-Atantic phenomenon."
It is occurring in an economic environment that is forcing lots of other businesses to scale back their growth plans, the report said.
Jeff Lenard, a spokesperson for the National Association of Convenience Stores (NACS), said there is no reason companies like Wawa and Quick Chek would be deterred by a difficult economy.
"During an economic downturn, the more you have to think about something, the less likely you are to make a purchase," Lenard told the Star-Ledger. "With convenience stores, if you're hungry, you're going to get something to eat. If you're thirsty, you're going to buy something to drink. Sales hold up during an economic downturn."
C-stores thrive by becoming part of a consumer's routine--a stop for hot coffee, a spot for good, quick sandwiches, a place to refuel the gas tank or restock the fridge with milk and eggs.
"We need to become a habit--that's what makes our economic engine work," Wawa CEO Howard Stoeckel told the paper. "We've got to be able to intercept customers as they travel in their daily routines. You've got to get them in and out of the store quickly. Speed is everything."
Lenard said c-stores focus on coffee for a variety of reasons; it is high margin and it can be the hook that keeps a customer coming back day after day. "People can be pretty obsessive with their coffee," he said. "If you have a good cup of coffee, you've eliminated a lot of the reason for someone to go to the competition."
But c-stores have grown by expanding their offerings."Foodservice is the focal point of every convenience store's efforts," Montgomery said. "It drives a lot of the other trends you see in the industry, including bigger stores and bigger parking lots."
The emphasis on foodservice, according to the experts, was driven by a customer demand for a more comprehensive offering of meals. "Consumers would come in for a cold beverage and want a sandwich, but not a bologna and cheese sandwich, something nicer.
"They would come in for a coffee and want a breakfast sandwich," Montgomery told the paper. "It was an evolutionary trend."
Wawa, which began as a dairy, is considered the leader, according to Montgomery, when it comes to foodservice, although he added that Quick Chek is catching up by offering fresh sandwiches and healthier selections of foods, including salads and snack packages of vegetables.
Margaret Chabris, a spokesperson for Dallas-based 7-Eleven, said the company has tripled the size of its real-estate team to scout out prospective store sites across the state. "It's a big growth market for us," she told the paper. "There are opportunities everywhere, downtown walkup stores, college campuses [and more]."
In 2010, the company opened 31 stores, stretching from North Bergen to Jackson. Wawa also sprinkled new stores across Central New Jersey and then went north to make its entry into Morris County, said the report.
Stoeckel said Wawa intends to create a larger mark in the county by adding four or five more stores in the next five years. "We expect to have the No. 1 market share," he said.
Quick Chek, which opened its first Morris County location in 1964, shrugs off Wawa's move into North Jersey. "We know there's a new one and there are a few more coming," Quick Chek spokesperson John Schaninger told the Star-Ledger. "It's just another competitor."
Wawa, Pa.-based Wawa Inc. has more than 570 c-stores throughout Pennsylvania, Delaware, Maryland, New Jersey and Virginia.
Whitehouse Station, N.J.-based Quick Chek operates 125 retail locations in New Jersey and southern New York; its locations include 12 pharmacy stores and 28 locations with fuel.
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