Dive Brief:

• Convenience store chain Wawa plans to build its first drive-thru-only location in Pennsylvania, which will sell fresh food, value meals, combo meals and coffee and specialty beverages, according to company press release. The location, which also includes curbside pickup, is expected to open in December. 
• The new 1,850 square foot format provides an opportunity for customers to experience Wawa products while remaining inside their vehicle, Wawa Director of Construction Terri Micklin said, adding that "it is critical to provide new ways to access Wawa, increase convenience and provide new options for service."
• The company also plans to add a drive-thru to a store under construction in New Jersey. 

Dive Insight:

Convenience stores adding drive-thrus is nothing new. In 2016, 14% of c-store operators surveyed by Technomic said they planned to add a drive-thru window at their store within the next two years. However, the novel coronavirus pandemic may have exacerbated those plans, as the drive-thru became a table stakes channel during the crisis. McDonald's, for instance, reported that almost 90% of its business during Q2 came from the drive-thru. 

Wawa's adoption of such a model seems to be a direct response to the crisis.

"We are hoping to learn from the layout, workflow and traffic flow at this location, as we continue to explore alternatives for longer term application to our stores post-COVID-19," Micklin said in the press release.

If the c-store chain finds success and expands the model, it could become an even bigger threat to fast food restaurants located in its East Coast markets. Wawa’s menu fits every daypart, including snacks, ice cream and newly launched plant-based offerings, and the company has a sizable footprint of 900 locations as of June 19.

C-stores were making some share-of-stomach gains prior to the pandemic. Foodservice sales accounted for almost 23% of sales at convenience stores in the U.S. in 2018, according to a National Association of Convenience Stores State of the Industry report. Additionally, a 2019 report from smartphone app GasBuddy finds that 56% of Americans purchase meals at least once a month at convenience stores, and younger consumers do so most frequently.

The segment has gotten a lift from the crisis as well. More than half (52%) of c-stores have reported increased grocery sales in the past few months. More c-stores (31%) are also promoting ready-to-heat meals.  

Continued menu innovation and the addition of off-premise channels, like drive-thrus, delivery and curbside pickup could blur the lines between fast food and c-stores even more. A&W credited its drive-thru formats for its double-digit sales lifts at its franchised c-store locations during the past few months. DoorDash also added 7-Eleven, Wawa and other convenience store chains during the spring to its app, for example, bringing the total number of convenience stores on the platform to 1,800.