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Sunday, July 14, 2024

NC trend: Wawa, Royal Farms set Tar Heel growth plans

North Carolina remains a popular state for large convenience store operators seeking growth, with Northeast chains Wawa and Royal Farms debuting in the state in May. They’re hoping to show similar success as rivals Sheetz, which showed up in North Carolina in 2004, and QuikTrip, which has become a Charlotte powerhouse after entering in 2012.

Wawa opened the first of 90 planned locations in North Carolina in mid-May in Kill Devil Hills. Four days later, Baltimore-based Royal Farms continued its southward in-state expansion, opening a location in Lumberton. Then there’s Buc-ee’s, the Texas-based chain building its first North Carolina location along Interstate 85 in Mebane in Alamance County. It will include a 74,000-square-foot building and 120 gas pumps.

An industry leader doubts these newcomers will overthrow current market leaders. Instead, the state is a high-growth area that marks a corridor for regional expansion plans, says Jeff Lenard, vice president of strategic industry initiatives at the National Association of Convenience Stores.

“Nobody is looking to get into an area and fight it out for market share,” says Lenard. “Especially in [an area] with a lot of great operators. They see opportunity instead.”

Wawa is a family-owned company that opened its first food store in a Philadelphia suburb in 1964, and still operates most of its 950 stores in the Northeast. But it opened its first Virginia store in 1998, then moved into Florida in 2012. Now, Media, Pennsylvania-based Wawa is trying to fill in its East Coast footprint by expanding in eastern North Carolina.  Other locations have been announced in Elizabeth City, Goldsboro, Rocky Mount
and Wilson.

Baltimore-based Royal Farms similarly views North Carolina as a viable expansion zone. It has more than 300 stores in five states, and opened its first North Carolina store in Grandy in Currituck County in May. It also plans a similar 5,300-square-foot store in Greenville.

The scouting process for new convenience stores has evolved from counting cars driving by a site to using census information to determine where population growth will translate into consistent business for breakfast, lunch and dinner consumers, says Lenard.

“What we’re increasingly seeing is the model where people are going to the store because they want to go to that store, and oh by the way, get gas,” he adds. “The biggest reason they want to go to a specific store is because of the food.”

Convenience stores can differentiate themselves by specializing in a certain type of food, says Lenard. Wawa features hoagies, while Royal Farms specializes in chicken.

Two major convenience-store newcomers have scored major success in penetrating North Carolina over the past two decades. Tulsa’s Cadieux family owns QuikTrip, which operates more than 1,000 stores in
17 states. Its first North Carolina store opened in Indian Trail in Union County in 2012. There are now about 45 locations in the Charlotte market.

Sheetz has built a huge presence in the Triad and Triangle since entering the state in 2004. It plans to expand to the Asheville market this year. Altoona, Pennsylvania-based Sheetz, which is also family owned, operates about 700 stores in six states, from Pennsylvania to North Carolina.

Nationally, the convenience-store industry remains dominated by international operators Circle K and 7-11, which are owned by French and Japanese companies, respectively. Circle K is the largest convenience store chain in North Carolina with nearly 400 locations, according to data firm ScrapeHero. It’s planning a store this fall in Wilson that will include a Krystal restaurant.

“If they’re (Circle K) known as the convenience store in the area where you can get Krystal, then that sets them apart,” says Lenard. “All these other places […] aren’t necessarily known for their burgers, so that’s quite a differentiator.”

7-Eleven has about 9,500 U.S. convenience stores and also operates about 3,800 Speedway stores, which Japanese owner Seven & I Holdings acquired from Marathon Petroleum for $21 billion in 2021.

Today’s convenience stores offer a much broader variety of products than a decade ago, making them competitive with drug stores and other retail outlets for items beyond snacks and beverages.

“It’s always good news when you have a bunch of competitors entering the market,” says Lenard. “That just means that all of them have to up their game, and it’s just to entice customers. That’s always good news.” 

Cooper Metts
Cooper Metts
Cooper is a business reporting intern at Business North Carolina. He is working towards degrees in journalism and economics at the University of North Carolina at Chapel Hill. He can be reached at coopermetts315@gmail.com.

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