An essential pit stop for gas, grab-and-go food and late night snacks, convenience stores have thrived in the COVID-19 era.
The stores maintain long hours and sell a multitude of items. Shoppers can drop in, buy everything they need and get out within minutes.
Several chains are vying for customers in central Pennsylvania, a market that has grown even more competitive in recent years. Nothing has proven that more than during the coronavirus pandemic when convenience stores quickly turned their focus to one-stop shopping as sales of pantry items, cleaning products, ready-to-eat foods and beer were hotter than ever.
“We adapted as different things shifted in the landscape as far as less people driving, people not eating out as much,” said Chris Hartman, director of fuels, forecourt, advertising and construction for the York-based Rutter’s convenience store chain. “We saw a shift in our customers and we adapted to meet their needs.”
As people made fewer shopping trips and stocked up on more during those outings, Hartman, an 11th generation Rutter family member, said it became apparent that more than ever before the stores had a need to fill – convenience.
More than a year later, central Pennsylvania chains including Rutter’s and Sheetz show no signs of slowing down, as both are expanding in the region as well as outside the state’s borders.
After all, central Pennsylvania, where Rutter’s, Sheetz and Wawa intersect, is one of the most competitive convenience store markets in the nation next to Des Moines, Iowa, said Jeff Lenard, spokesman for the National Association of Convenience Stores in Alexandria, Virginia.
One of the biggest convenience store rivalries in the nation combined with innovations by hometown Rutter’s and central Pennsylvania’s complex highway system gives the region credibility. Meanwhile, the stiff competition doesn’t appear to be preventing rival chains such as 7-Eleven and Royal Farms from gaining a foothold.
7-Eleven, home of 50-ounce Double Gulps, is awaiting approval for liquor licenses for proposed stores in West Hanover Township in Dauphin County and Carlisle in Cumberland County. Maryland-based Royal Farms, known for fried chicken, has crossed the Mason-Dixon line, opening stores in Lancaster and York counties.
Of course, Turkey Hill Minit Markets has been part of the local landscape for decades and operates dozens of stores across central Pennsylvania.
The chains, no longer just quick spots for gas, have evolved with drive-thrus, app ordering, menus of cheesesteaks, burgers, six-packs of beer and bottles of wine and gaming machines. They’re securing prime real estate, mostly on busy corners and well-traveled roadways.
“They have really upped their game, and in those cases spending millions [of dollars] on sites,” said Robert Gorland, vice president of Matthew P. Casey & Associates in Harrisburg, which specializes in supermarket site selection and feasibility studies.
- Breakdown of Central Pa.’s top convenience stores, including Sheetz, Wawa, Rutter’s and Turkey Hill
Allegiance to convenience stores is strong. Entire social media threads are dedicated to Pennsylvania’s most heated debate: Sheetz vs. Wawa.
Some loyal fans have tattoos of their favorite stores, while others snap wedding photos at their favorites. Documentaries detail the fierce competition, referred to as “the most heated food rivalry in the country.”
Any notion the two powerhouses signed a gentleman’s agreement to not encroach on each other’s territory is unfounded. Along the Berks and Lancaster county lines, Altoona-based Sheetz and suburban Philadelphia’s Wawa have been building stores.
“Usually when you see stores go into someone else’s backyard there might be a certain amount of ego involved,” Lenard said. “The people who run both of those companies are really smart. If there is a good business reason to do it, it absolutely makes sense.”
If anything, both are focused on growth outside of their home markets. Sheetz is expanding in Ohio where it plans to open a dozen stores in Columbus this year, reaching nearly 50 stores by 2025.
It also has plans in Pennsylvania.
“Sheetz will also be opening multiple new locations in Pennsylvania, near the Pittsburgh and Scranton areas, Western Maryland and Northern Virginia in the spring and over the summer that the retailer will be announcing more information on at a later date,” said Nick Ruffner, Sheetz PR manager.
Its store in Derry Township at Park Village Plaza is temporarily closed for remodeling and will open later this summer.
Meanwhile, Wawa is focused on new stores in Maryland, Florida and New Jersey as well as a commitment to open 40 stores in northern Virginia over the next 15 years. It recently opened a first standalone drive-thru next to one of its Bucks County locations. Last week, Wawa opened a new store in Emmaus, just outside Allentown, the chain’s third new store in Pennsylvania in 2021.
No matter the preference, Pennsylvania is a leader in the convenience store industry. As of 2020, there were 4,698 convenience stores operating in the state, according to the National Association of Convenience Stores. In comparison, Michigan has 4,855 stores, Illinois 4,629 and Ohio 5,564.
Wawa, based in Media, Delaware County, ranks 14th nationally based on the number of stores it operates, while Sheetz falls in 20th place, according to Convenience Store News.
Meanwhile, Rutter’s, listed No. 81 under CHR Corp., could best be described as an overlooked stepchild.
More than ‘Cokes and smokes’
The fact the family-owned Rutter’s, the nation’s oldest vertically integrated food company, is innovating, proves the market’s relevance, Lenard said.
The Rutter’s family farm dates to 1747, while the chain is celebrating 100 years since opening its dairy company. Today, the chain operates more than 80 stores and has been honored as U.S. Convenience Store Chain of the Year and International Convenience Retailer of the Year.
But Rutter’s is not resting on its laurels.
“We are well aware of the competition that is here and exists in our marketplace. We believe that good competition pushes you to get better which is what it has done for us,” Hartman said.
At more than 10,000 square feet, Rutter’s stores are among the largest in the industry. The chain has evolved from the traditional convenience store model selling milk and “Cokes and smokes” to a full food menu with beer, wine and spiked slushies as well as gaming machines in some stores, he said.
Video gaming terminals opened in 2019 after truck stop gambling emerged as one of the last compromises in the legislature’s massive 2017 expansion of legal gambling. The terminals operate at truck stops such as Love’s Truck Stops and Kwik Fill locations but not Sheetz or Wawa.
Gaming might be one draw, but food is bigger.
Rutter’s menus cover grab-n-go items – sandwiches, subs and sodas – and less traditional fare such as chicken pot pie, Route 30 burgers sandwiched between grilled cheeses; jumbo chicken wings; lo mein bowls and fried shrimp baskets. Hartman said Rutter’s works with vendors to bring in inventive, new foods and talks to customers about what they want and need.
“We are always looking for the next thing and we are never satisfied with where we are. We are always looking for the next thing,” he said.
During the pandemic, the stores quickly ensured they had all the products and services customers needed, Hartman said, noting people were making fewer trips but purchasing more. Some stores carry items such as cans of Campbell soup, bottles of ketchup and mustard, cat food and Log Cabin syrup.
The pandemic is not slowing growth plans. Recently, Rutter’s opened a store in Gap, Lancaster County with food and beverage menus, a beer cave, 30-seat dining area, large restrooms as well as 14 gasoline fueling positions and five dedicated truck diesel lanes.
This year it will invest more than $100 million on new stores and expansions, including new builds in Kutztown, West Virginia and Maryland. It also plans to remodel about 10 stores. Hartman said Rutter’s is always looking for places to expand.
“In terms of an area we are focusing on, we are really just focused on expansion out from the area in each direction,” Hartman said. “Where do people need what we have?”
Building them bigger
Convenience stores take up prime real estate for a reason: Their business model is built on accessibility.
More people visit a convenience store each day than any other brick-and-mortar retail location, with about half of the U.S. population buying something at a convenience store every day, according to the NACS.
On top of it, 43% of Americans say they live within a mile of a convenience store. So maximizing square footage has never been more important in the name of one-stop shopping. Gorland said chains are building larger stores to accommodate kitchens, alcohol sales, gaming machines and even car washes, all amenities that increase gross profits.
“The small Turkey Hill of the 70′s would be a couple thousand square feet and now you are looking at most [chains] from 5,000 to 7,000 square feet,” he said.
Many have been buying properties at more expensive intersections and spending money on construction and additional gas lanes and in some cases car washes, he said. Plus, the added food service requires more square footage.
Sales of food increased 4.4% in 2019 and represented 25.4% of inside sales, up from 22.6% in 2018, according to NACS.
All of the chains have bumped up menus beyond hoagies. Wawa recently introduced all-natural angus burgers on a new dinner menu with pasta bowls. Sheetz sells taco boxes, cheesy bacon tater bombs and Nashville hot chicken sandwiches.
One of the biggest growth areas for Pennsylvania stores has been beer to-go and wine sales. Changes in the past decade to the state’s liquor laws have permitted convenience stores to purchase restaurant liquor licenses in record numbers.
Sheetz leads the pack with 223 stores in the state selling beer while Rutter’s carries alcohol at 38 locations and Wawa is licensed for two stores with one pending in Philadelphia.
“To a certain extent, the alcohol sales pair well with the food offerings because in some cases you are buying a six-pack or decent bottle of wine and you are getting some takeout food,” Lenard said.
Sheetz and Wawa have launched limited-edition beers in partnership with craft brewers. Sheetz has released collaborations including Project Coffee Hopz with Rusty Rail Brewing Company in Mifflinburg, Project Brewberry Muffinz with Evil Genius Beer Company in Philadelphia and Project Hop Dog with Neshaminy Creek Brewing in Jenkintown.
Rutter’s hasn’t shied away from jumping into another cool alcoholic drink trend: spiked slushies. In 2019, the chain was the first in the state to introduce the frozen malt beverages sold in about 16 flavors in 20-ounce cups and 64-ounce and 128-ounce party bags.
“It’s something our customers showed that they wanted and we felt we could do it really well and thought we could provide them with a lot of options,” Hartman said.
The future of booze sales isn’t projected to slow down.
If anything the pandemic fueled sales as opportunities to drink outside the home have dropped off due to the cancellation of sport events and concerts and restrictions with bars and night clubs, Lenard said.
More stores are coming
Draw a circle around the headquarters of the region’s largest convenience store chains – Sheetz in Altoona, Wawa in Philadelphia and Royal Farms in Baltimore – and they intersect in Harrisburg, Lenard said.
Harrisburg’s crisscrossing highway system – Interstates 83 and 81 and the Pennsylvania Turnpike – is a draw for stores appealing to travelers making pit stops. Apparently, there is room for more.
7-Eleven is delving into alcohol sales for the first time in central Pennsylvania. A 4,140-square-foot convenience store is proposed at 1003 S. Hanover St. at the former K.A. Mullen’s Landscape Supply and Towing in Carlisle. Borough council approved a liquor license transfer in February from Vrai Restaurant in Lemoyne.
Meanwhile, a 5,000-square-foot store with a liquor license is in the works at 7600 Allentown Blvd. in West Hanover Township. The chain didn’t respond when asked to comment about the new stores.
However, the company is opening “evolution” stores in metropolitan markets such as Dallas, New York and San Diego, touted as a testing grounds for innovations such as walk-in beer coolers, expanded hot and novelty beverages and Laredo Taco Company quick-service restaurant.
It recently opened its first drive-thru at a Dallas store.
“7‑Eleven’s mission is to give convenience customers what they want, when and where they want it,” said Joe DePinto, president and CEO, in a press statement in 2020. “Our evolution stores bring outstanding innovation to life through new food and beverage platforms as well as through digital experiences.”
Another newcomer, Royal Farms is growing its footprint in Pennsylvania where it operates 20 out of 219 stores. The Baltimore chain, nicknamed RoFo, has built a following with gas pumps, snacks, coffee and a cult favorite – “World-Famous” fried chicken.
The chain operates stores in Hanover, Wrightsville and York.
A Royal Farms is also moving into the Philadelphia area where it recently opened a store in Collegeville. While Royal Farms may seem new to some, the chain dates back to 1959 when its owners expanded their Baltimore area dairy operation into a milk store.
“Everyone who comes into that market has to bring their A-game because they see what the competition is offering,” Lenard said.
In the end, central Pennsylvania’s competitive market is a win for consumers, Lenard said.
“Everyone wants to steal a customer here or there. For the competition, the only way you do that is by standing out,” he said, adding it might be through customer service, new innovations in products or services such as delivery.
However, the stores are not just competing against one another but against other retailers, mainly drug and dollar stores. In many areas of the country, the dollar store has really become the place to shop and the stores have evolved, Lenard said.
Dollar General Inc. initiated a “DG Fresh” initiative designed to self-distribute fresh and frozen products, while Dollar Tree Stores, Inc. is adding alcoholic beverages in other states.
Dollar stores tend to sell more pantry items compared to convenience stores where nearly 83% of purchases are consumed within one hour, Lenard said. But during the pandemic convenience stores have added staples such as frozen pizza and takeout meals as a convenience, he added.
Still, the market remains bright for growth.
“If more convenience stores are coming in the area it’s because either more population is going into an area or convenience stores are doing something better than another channel or have evolved,” Lenard said.