This weekend, former Massachusetts Governor Mitt Romney took some heat for using WaWa’s “amazing” touch-screen ordering system as a symbol of private sector creativity.
(The presumptive Republican presidential nominee also solicited heckles from the crowd for praising WaWa while deep in the territory of its archrival, Sheetz, which also uses touch-screens for food orders.)
But as the Washington Post’s Erik Wemple points out, the Central Pennsylvania convenience store market really is a competitive environment where chains are doing their best to one-up each other. “According to [the National Association of Convenience Stores],” he writes, ”convenience-store competition is perhaps no keener anywhere across the country than among the hills and truck-heavy corridors of southern Pennsylvania. ‘The York, Pa., area is probably as competitive as you’re going to get,” says Lenard. “You have Sheetz, Wawa and Rutter’s.’”
And as we reported earlier this year, that competition helps keep Pennsylvania’s gas prices down:
So why is Pennsylvania’s average gas price lower than most of those surrounding states, even when its taxes are higher?
Tom Kloza, the chief analyst for the Oil Price Information Service, said the state has one of the most competitive gasoline markets in the country. “That’s because you have companies like WaWa, Sheetz. There’s Turkey Hill,” he said. “There’s a lot of independent chains where the business model isn’t so much about making money on gasoline at the pump. It’s about getting the customers to come inside and buy deli items.”
So stores don’t need to mark up their gas prices to make money. “You’re breaking even on gasoline. But the customer’s coming inside for a doughnut, or a sandwich, or a sandwich, or a candy, snack, soft drink. That’s where the real profit lies,” explained Kloza.