7-Eleven, Wawa compete with Peninsula growth plans

Tara Bozick
Contact Reportertbozick@dailypress.com
7-Eleven, Wawa compete with Peninsula growth plans

As consumer eating behaviors evolve with the growing buying power of millennials, both 7-Eleven and Wawa are preparing to capture those food dollars by expanding on the Peninsula.

Wawa is building a store at Pembroke Avenue and Mercury Boulevard in Hampton that is scheduled to open in November, said spokeswoman Lori Bruce. The company is also planning a Norfolk store to open next year and is continuing to look at other Virginia sites.

Three new 7-Eleven stores are slated to open in Newport News and Williamsburg in 2017 with more sites in the works, said spokeswoman Elizabeth Evans.

During the past year, 7-Eleven has added stores at Jefferson Avenue and 27th Street, on Warwick Boulevard across from Christopher Newport University, at 4915 W. Mercury Blvd., at 61 E. Mercury Blvd. and at Mercury Boulevard and Fox Hill Road in Hampton, Evans said.

Already, both convenience store chains collectively capture 10.3 percent of food and grocery dollars in Hampton Roads, according to the latest Food World annual report.

To put that in perspective, 7-Eleven is the No. 4 ranking food retailer in the region, beating Harris Teeter and Kroger, according to Food World's data. No. 12 Wawa comes in ahead of Whole Foods, Fresh Market, Sam's Club and Trader Joe's.

Still, market research from The NPD Group based in New York shows that both grocery stores and convenience stores may be competing more against fast food restaurants by expanding their prepared meals and snacks. Millennials, the 18-34 age group, want convenience but they also want healthier food.

Fast food took a hit in Hampton Roads last year as the number of regional fast food locations dropped by 5 percent, according to NPD's Annual ReCount report. Still the number of higher-end fast food joints in the "fast-casual" category such as Panera or Five Guys saw a 5 percent increase in numbers last year.

While millennials prefer the quality and fresh ingredients of fast-casual restaurants, though, they also are frugal and they don't like to wait in line. This is where 7-Eleven and Wawa can compete.

Wawa caters to millennials' preference for customization, Bruce said. The chain is known for its kiosk ordering and made-to-order sandwiches and recently launched veggie hoagies and a roasted chicken option for sandwiches. In addition to its coffee, the chain is also known for a wide selection of grab-and-go fruit and veggie snacks packaged with dips such as hummus.

7-Eleven franchisee Bob Bullock of Newport News said he thinks millennials want to go in, find what they want and move on. He said many of his customers at his Jefferson Avenue and Main Street store in Newport News are shipyard workers, students at the nearby Riverside College of Health Careers and Latinos.

U.S. Hispanic consumers are more likely to buy groceries at convenience stores, and they prefer fresh and hot foods, The NPD Group reported in 2013. About a quarter of the U.S. Hispanic population is in the millennial age group with Hispanics making up 21 percent of all U.S. millennials, according to the Pew Research Center.

7-Eleven has expanded its hot foods from hot dogs, taquitos and pizza to include cheeseburgers, hamburgers, chicken sandwiches and better chicken wings, Bullock said. His also even carries breakfast pizza, and expanded its cold sandwiches and salads. Everything is brought in fresh daily, he said.

The chain also is expanding the selection of its own private-label items to include premium-ingredient and healthier, yet still affordable, snack options including various trail mixes, quinoa chips, kettle popcorn and snack bars. This makes it more competitive with Wawa, who entered the Hampton Roads market carrying those types of items.

Hampton Roads is still 7-Eleven territory with 244 stores compared to Wawa's 28 stores as of the end of March, according to the Food World report. Bullock also plans to franchise more 7-Eleven stores in the region after adding a second franchise in Chesapeake because he likes the business model and corporate product research support.

Matthew Allen, a 26-year-old ECPI computer network security student of Newport News, said 7-Eleven is more familiar to him and is more convenient to get to with all of its locations. He also thinks it's more affordable than Wawa.

"I come here for my snack needs," Allen said. "If I'm hungry, I'm going to Chick-fil-A."

Still, Wawa has some die-hard fans.

"We stop here every day," said Michael Dain, 28, who works in tree service on the Peninsula.

Dain of Carrollton works two jobs so he doesn't have time to prepare and bring his own meals. He prefers the convenience of shopping at Wawa and orders custom sandwiches and provisions for the day including Gatorade and ice. He thinks Wawa is healthier than 7-Eleven and he would rather shop there than at a fast food restaurant because of the variety of foods and drinks.

"You have more options here," Dain said.

Bozick can be reached by phone at 757-247-4741. Sign up for a free weekday business news email at TidewaterBiz.com.

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