Tenn.-based Weigel’s Farm Stores. Inc., may be famous for its dairy aisle, but Chairman Bill Weigel believes candy displays sweeten the cash register ring.
Bill Weigel knows that many gas stations are basically man caves, epitomized by their poorly lit sales floor, barely maintained bathrooms and their emphasis on beer and cigarettes.
Which is why Weigel, chairman and ceo of Weigel’s Farm Stores Inc., doesn’t like to call his chain of stores gas stations. And, he doesn’t really like the term “convenience store” for the same reason.
“That’s one image we certainly don’t want,” he says. “We’ve gone after that female customer strong. They want light, they want bright, the want clean, they want [good] restrooms. Not dark and dingy.”
Weigel’s plan to grow his Tennessee chain of stores by targeting an underserved demographic seems to be working. In fact, about 50% of the chain’s customers are female — above average compared to a typical C-store.
“That was the customer that wasn’t typically shopping in a convenience store, and if we could have them, we could own that market over competitors,” he says, explaining the thought process. “They spend a lot of money and make a lot of decisions.”
It’s a thought pattern that’s come full circle for the family business, which started out as a dairy more than eight decades ago.
It was 1931 when Walter and Arthur Weigel started selling raw milk from their “herd” of four cows for nine cents a gallon. The family saw success doing that for awhile, but then, something in the culture changed — the women.
As more females entered the workforce, fewer wives were home to greet the milkman. And with no one home, families stopped ordering milk for home delivery.
The Weigels realized they needed to evolve, and their first attempt was opening a drive-through milk store in Dec. 1958 on Sanderson Rd. in Knoxville, Tenn.
The next natural step turned out to be a walk-in store, which opened in June of 1964 and also carried groceries. It would become the inspiration for the 60 C-stores the company now owns and operates in the Knoxville, Tenn. area.
And they’re still processing and selling their very own line of milk — produced in the family-owned Broadacre Dairy.
“We run locally operated and family owned stores in the Knoxville area.” says Mike Del Aguaro, who has been the company’s marketing director for 25 years. “We also operate a dairy that distributes our milk, which we process to all 60 stores.”
It’s noteworthy that every single one of the company’s stores are within a 50-mile radius of corporate headquarters in Powell, Tenn. The logistics of delivering milk to the stores demands that they be nearby.
“The dairy has kind of caused us to go in a concentric circle and that’s been good,” Weigel explains.
He adds that the company has learned the hard way that if they get too far away from Knoxville, they have to work that much harder to educate local consumers about who they are. So, their growth plan means taking small steps away from Knoxville, gradually spreading the word.
That doesn’t mean they’re not opening new locations. Last year they opened five stores and plan to open at least four every year from the ground up. Like their milk, they do all their construction in-house, employing a full-time staff of construction workers, which helps them tightly control costs.
“We’re optimistic in expanding and acting like there’s no recession,” says Weigel. “We just don’t know any other way to do it.”
A typical store includes a gas station and 37,000-sq.-ft. retail space featuring two refrigerated doors for the company’s own dairy products. There’s also a grocery section that goes beyond the stereotypical gas station food by offering fresh fruit and healthy snacks, as well as health and beauty items, automotive products, coffee and, naturally, candy.
Shoppers can browse through a 14-ft. candy aisle, which features six shelves of candy bars and three shelves for gum and mints. There are also candy displays near the register, which are great for impulse sales.
In addition, the stores feature 11 ft. of snacks, mostly from Frito Lay.
At a Glance:
Famous for: Producing its own line of dairy products at Broadacre Dairy.
Headquarters: Powell, Tenn.
Number of locations: 60
Total sales: About $100 million (excluding gasoline)
Percentage of sales from candy: 3.3%
Leadership Team: Bill Weigel, chairman and ceo; Ken McMullen, president; Doug Yawberry, v.p. of operations; Wade Letsinger, controller; Brian Donoghue, director of food service; Mike Del Aguaro, merchandising manager
Joe Stocker, chief information officer; Chris Ooten, director of real estate; Kurt Weigel, director of recruiting; Douglas Rouch, milk plant manager
Del Aguaro says he finds most of his new candy and snack items either through vendors or at the National Association of Convenience Stores (NACS) annual show.
“If there’s something hot or new, we look at it,” he explains. “We’ll do a 30-day test to see if it sells. If it sells, it stays in; if it doesn’t, we pull it out.”
Recently, he’s seen success with Snicker’s PB Squares, Hershey Air Delight, and Mallo Cups. He’s also added Goo Goo Clusters to the lineup, but he says it’s a little early to tell how well they’re selling yet.
The stores do about $100 million in sales, not including gasoline, and about 3.3% of that is confections.
“We devote probably a lot more space [to candy] than the average store. It’s been a good stable industry for us,” Weigel says. “People eat more chocolate when times are bad. They treat themselves. They can’t afford a vacation, but they can always afford a candy bar.”
Of course, it doesn’t hurt that so many of Weigel’s shoppers are female (known for their love of chocolate) who often bring their children (known for their love of sugar) to the store with them.
But it’s not just impulse candy the stores are interested in selling, which is where Weigel’s Rewards Cards come in.
Originally created as a milk loyalty programs — shoppers get their 17th gallon of milk free — it’s evolved to entice customers to shop for all sorts of items, including candy.
Last year, they ran a contest where they gave away campers, Wave Runners, iPads and gas for a year. On a regular basis, members also receive a monthly email for a coupon they can use to get something for free.
The company also promotes the program through social media sites such as Facebook and Twitter, with posts that encourage urgency, like this one from early July, promoting a contest they ran throughout that month:
“Starting now until 5 p.m., all Rewards Card holders can get a 16-oz. Pepsi or Mountain Dew product and a pack ofFrito-Lay Cheese Crackers with Peanut Butter for free! No purchase necessary, just whip out your Weigel’s Rewards Card! Get your Rewards Card, get rewarded during the Summer of WOW!”
Weigel says it can be a good way to get the word out about new products. The company works with manufacturers to secure a lower price point for the item they want to give away and in turn the manufacturers get a chance to get their word out about a new item.
“We work with our vendors on new items to get them established in the market,” he explains. “We have 60 stores to test new items and what better way to test a new item than to give it away? The results have been great and the repeat sales afterward have been very successful.” he explains. It allows us to upscale the program.”
“[The customers] all come in for their free items and they get a kick out of getting something for free,” Weigel says.
The stores also lure shoppers in with features like no-fee ATMS and a frozen drink called Monkey Ice, which comes in a variety of fruit flavors.
Another key factor in the chain’s success is Weigel’s approach to store management, which started with the first store.
“A portion of every sale goes to the manager and the assistant manager,” he explains. “So really, it’s kind of like having a franchise without the $200,000 investment or whatever you have to make. Every dollar that comes in is part theirs and they become a part of the store. “
As for the future, Weigel says the plan is to grow the company 10-15% annually, at least partly by moving more and more into foodservice. His stores already have started selling fresh baked biscuits.
“We sell the devil out of them,” he says.
The next step is creating a lunch program and late-night snacks. If his family’s track record is any indication, it’ll either work out or they’ll keep adjusting things until it does.
“We’re serving now the grandchildren of our original customers,” Weigel says. “We’ve just had good people in our stores, and that will always win.”