Nine decades in, Weigel's expands to new markets as it evolves for consumers

In 1994, Bill Weigel saw a cappuccino maker in an Atlanta convenience store.

He thought the machine that made a drink "nobody had ever heard of" would be his next ICEE machine, which Weigel's convenience stores introduced to the Tennessee market in 1967.

"We love to do that," Weigel, the company's chairman, said. "We insist on doing that. First to market is very important."

What's now a common place coffee drink was one in a string of innovations Weigel's has made in its 90-year history, including launching self-service gasoline pumps in 1970.

Bill Weigel is making plans for the family-owned company to continue that innovation into the future as the convenience store chain celebrates its 90th anniversary this year. In 2021 and beyond, innovation looks like an investment in prepared foods, technology and expansion into a new market.

Weigel's plans to expand into the Chattanooga region and has already selected sites for some stores there and hired district managers.

It also plans to open additional stores in the Tri-Cities area.

Bill Weigel said the company plans to open four stores a year for the next two years. It's an increase in pace for the company, which has recently averaged opening about three stores a year. As of mid-June it it will have 70 stores in total.

Aside from a store here or there, Bill Weigel said the company will focus outside the Knoxville market to grow.

Hiring in new markets is an added challenge in an already challenging recruiting environment, recruiting director Kurt Weigel said. The company has 1,020 employees. It takes about 30-35 employees to open a new store, and the company has faced hiring challenges as people decide whether to return to retail jobs as COVID-19 vaccinations rise.

Bill Weigel said he hopes to expand the brand to 100 stores, a threshold that he said could allow the brand to compete with "major, major companies."

 

Weigel's ranked No. 95 on Convenience Stores News' Top 100 Convenience Store Chains of 2020 list.

There are more than 152,000 convenience stores in the U.S., according to the National Association of Convenience Stores, in total a $650 billion industry.

Technology and baked goods

Like almost every industry, convenience stores saw shifts in customer habits and preferences during the pandemic.

Sixty-five percent of shoppers surveyed in a 2021 study by Convenience Store News reported visiting a convenience store at least once a week, down from around 75% in 2020. Only 14% of shoppers surveyed said they're frequenting convenience stores more often.

Customers, Weigel's executives say, became more interested in prepared foods and hands-off shopping experiences.

President Doug Yawberry said the company is investing in more customer-facing technology allowing for mobile ordering, curbside pickup and delivery. The company is replacing its point-of-sale system later this year.

The convenience store industry had not invested much in technology until about five years ago, he said.

"Part of the biggest issue is the updating of the current technology we have in store whether it's POS systems, loyalty programs, those are things that are important moving forward," Yawberry said. "We're moving very rapidly and changing some of those large platforms so that we can adapt now and adapt in the future."

Food sales across the industry increased by 5.2% in 2020 and have been increasing  over the past five years, according to Convenience Store News. Frozen dispensed beverage sales grew the most, with a 12.5% increase in sales per store.

Consumers are utilizing delivery to get food from anywhere, a trend hastened by the pandemic. There's also been a demand in-store for more prepared foods, the Weigel's team said. That means expanding the company's pizza and chicken programs that launched in recent years.

Industry-wide, surveyed customers most often purchased prepared pizza, followed by hot dogs and sandwiches, according to a Convenience Store News report.

Some convenience stores are utilizing ghost kitchens for its prepared foods, a third-party off-site partner. Weigel's, which has been preparing its foods in-store, is planning to build a commissary where take-away food will be prepared. The company is in early stage planning to build a larger bakery as well, Bill Weigel said.

The company is planning to build a 8,000-10,000-square-foot building that would house all food preparation. Much of that is currently done in-store.

"Over the years we have built our reputation around the dairy in many cases, which was a reputation of delivering a quality product to our customers," Yawberry said. "When we talk commissary, when we talk bakery, same principles apply. And we have control over those things to move forward, and our food service program."

Innovation in the industry will continue. Visitors to this year's Indianapolis 500 could experience an autonomous convenience store shopping experience, according to Convenience Store News. Computer technology tracked what ticket holders picked up and emailed a receipt within moments of leaving the store.

 

And in May, the 622-store chain Sheetz became the first convenience store chain to accept bitcoin at the pump and in-store.

Looking from vegetable farming to electric vehicles

The Weigel family started as vegetable farmers, but pivoted to the dairy business, one of many changes the family has made to keep the business going. When housewives went to work, it left home delivery behind and opened drive-thru milk stores.

Drive-thru stores became walk-in stores, then the family added groceries and eventually gasoline. Bill Weigel said he estimates gasoline has a 30-year life span and the company will need to prepare for the onset of electric cars and whatever else comes next.

"But we have to change, and I've learned that you better be prepared for what's next, not what's passed," Bill Weigel said. "I've learned to be patient, I didn't make a profit for the first seven years of my life, so I know it's not that easy. You have to be persistent, stay the course...Kinda the last guy to give up wins."

The company will continue to sell its milk and bakery products exclusively in Weigel's stores.

"Our family's committed to keeping the company going," Bill Weigel said.  "I'm proud of that."

Source: Knoxville News Sentinel, by Brenna McDermott

The East Tennessee Economic Development Agency markets and recruits business for the 15 counties in the greater Knoxville-Oak Ridge region of East Tennessee. Visit www.eteda.org

 

Published June 17, 2021