As it celebrates its 80th anniversary, the Knoxville, Tenn., chain is opening new stores, embracing an expanded foodservice program and investing in cutting-edge technology.
By Erin Rigik, associate editor.
With lofty expansion plans ahead, a focus on foodservice and a strong push to capture the elusive female demographic, Weigel’s Inc. is poised to make a big splash in a competitive market.
Having just celebrated its 80th anniversary this summer, Weigel’s, which operates 56 convenience stores in the Knoxville, Tenn. market, recently opened its newest locations in Lake City and Greenville, Tenn. The chain is on track to complete the roll out of five newly-constructed stores this year, followed by another four builds next year. As a result of its assertive expansion plans CSD has identified Weigel’s as a Chain to Watch for 2011.
When it comes to adding new stores, Weigel’s prefers to build all its locations from the ground up, thanks to its two company-owned construction teams, which have the capacity to construct 4-5 stores a year. The new stores—which measure 4,000-square-feet—are erected as quickly as the crews can build them.
But despite its eye on expansion, Weigel’s will keep its growth within Tennessee. “We’re trying to stay in one media area in a 75-80 mile radius in Tennessee, where we have our milk trucks and our distribution system,” said Chairman and CEO Bill Weigel. “There are so many advantages to being in the same vendor area. All our vendors are located in Knoxville, so we’ve been very fortunate that all our media— the same TV stations, radio stations and newspapers—reach those areas, so from a distribution standpoint, we’re poised to be able to distribute a lot more products.”
This November, the construction crews will break ground on a new West Knoxville location—Weigel’s third build this year. “We’re building in an area I’m sure never thought it would have a convenience store,” Weigel said. “It’s a pretty exclusive area about 8-9 miles from any other retail store.”
The new West Knoxville store is set to be part of a four unit commercial park and will feature a more upscale image. It also marks Weigel’s third unit with exterior LED lighting, which it has already added to the Lake City and Greenville, Tenn., stores and plans to incorporate into two new stores in Seymour and Crossville, Tenn., which are also scheduled for construction this fall.
But while the chain is eager to test the new lighting system, it’s not ready to jump on the LED bandwagon at all its locations just yet. “We’ve always had brightly lit outlets. We’re going to start with these five stores and see how they go, look at our utility costs and scrutinize the results before we move ahead,” Weigel said.
Catering to Hungry Customers
While it may be an 80-year-old company with deep dairy roots, Weigel’s is not too mature to change its stripes. Beginning with this wave of new expansion the company plans to develop its stores with foodservice customers in mind.
“In the last 3-4 years, we’ve realized that foodservice is going to have to replace cigarettes, which we are programming to go out gradually. Customers want foodservice and they are taking to our offering very rapidly,” Weigel said.
Weigel’s signature food products include its made-from-scratch Bun-on-the-Run breakfast sandwiches, which are baked fresh in-store each day to entice morning daypart customers. Currently, the chain sells 4,000-5,000 Bun-on-the-Run products a week. The dashboard-friendly offering is a favorite with its grab-and-go customers.
In an eight-foot tall case, Weigel’s showcases its massive roller grill program that includes two large grills full of hot dogs and Ruiz Foods’ Tornados. Fruit options and fresh commissary sandwiches support the offering. The chain partners with a commissary to supply the sandwiches and fruit fresh.
“With the roller grill, we think having a massive production is the way to make it work,” Weigel said. “It’s working very well, and we offer a very jumbo dog that is bigger than any hot dog you can buy elsewhere.”
Stores also have rolled out a fresh baked lunch program of hot sandwiches, including Philly steak with pepper jack cheese; jumbo ham and cheese; Flatz paninis in Buffalo chicken and three-meat Italian varities; and Weigel’s proprietary corn dogs, among other offerings.
Currently, the chain keeps its lunch daypart going into the evening to tempt hungry dinner customers, but continues to search for the perfect third daypart. One plan being mulled over is to leverage a local Knoxville restaurant to provide a carry-home frozen or fresh entrée item for the dinner daypart.
“The breakfast and lunch programs have been more successful than we ever dreamed. It’s just something the customer is wanting right now, and it’s going to be a big part of our business,” Weigel said. “We’ll be going gangbusters improving it every time we can.”
In addition, Weigel’s offers a variety of proprietary items throughout the store, such as its popular Skim D’Lite milk. “We sell more skim milk per gallon sold than any dairy in the U.S.,” Weigel said.
Other signature products include Monkey Ice-branded frozen drinks, fresh-brewed Kona coffee and flavored cappuccinos, iced teas, lemonade, chocolate milk and proprietary eggnog during the Christmas season.
Eight Decades of History
Weigel’s is proud of its 80-year history. The company was founded as a family dairy in 1931 by brothers William (Bill Weigel’s father) and Lynn Weigel. Back then, the business was called Broadacres Dairy, and it began when the two brothers purchased six cows. The Weigel brothers were the first in Knoxville to pasteurize milk in 1935, and by 1956 Weigel’s had grown its operation and was milking more than 400 cows daily. It led the industry with an innovative aluminum irrigation system, the first of its kind in east Tennessee. Originally the company provided home milk delivery, and in December 1958, opened its first 500-square foot drive-through milk depot in Knoxville.
The drive-through milk depots evolved into walk-in milk stores, the first of which opened in June 1964. Then Bill Weigel took the business a step further by opening Knoxville’s first c-store in 1964, under the name Weigel’s Farm Stores. “When we first opened the c-store we were mainly focused on our dairy products and to this day we are heavily dairy oriented. We were a Jug ‘O Milk Store—the original name for the drive-through milk stores—and we had a returnable gallon service, which we kept up until eight years ago when we evolved into the throw away containers,” Weigel said.
In early 1967, Weigel’s introduced the classic ICEE brand of frozen beverages to the Knoxville market.
“I was at a NACS convention in 1967 and met with the ICEE folks when the product was brand new. We installed the first 10 ICEE machines east of the Mississippi and for the next 43 years we were the exclusive ICEE distributors until they sold to a national company,” Weigel said.
In 1970, Weigel’s installed the first self-service fuel pumps in Knoxville after a business man from Texas persuaded Weigel to let him install two gas pumps in front of one of his stores. “He said, ‘I’ll put in all the equipment and give you half the profit.’ And I said, ‘That’s my parking lot. That’s where my customers park. That doesn’t sound very smart,’” Weigel recalled with a laugh. “I told him I’d do it if he promised me that if for any reason I didn’t like it that he’d dig it up. I figured no one would sign a contract like that and that the conversation was over.”
But to Weigel’s surprise the man returned with a contract and the gas business proved popular with customers. In 1972, Weigel’s bought the gas business and started installing its own gas pumps at all its locations. “We’ve had Weigel’s-branded gasoline ever since,” Weigel said.
Today, Weigel’s continues to venture into new areas. In January 2011, for example, Weigel’s introduced no-surcharge ATMs to the Knoxville market.
80 days of Wow
In celebration of its 80th milestone, Weigel’s kicked off the “80 Days of Wow” campaign running through Aug. 31, which is awarding $200,000 in prizes—one prize a day for 80 days—through social media and in-store promotions. All members of the Weigel’s rewards program are eligible to win. Prizes include tractors and a year of free coffee, milk or gas, among others. Each of the 80 lucky winners will also be added into a grand prize raffle for a chance to win a new car. The celebration culminates in a grand prize cookout in early September.
“Naturally we’re signing up a lot of new rewards card customers during this promotion,” Weigel said.
Since the chain kicked off the Weigel’s Rewards Card program three years ago it has had a steady stream of new users. Before embracing the technology, the company had punch cards for products such as milk, where customers received the 16th gallon free. When the rewards card was rolled out, it incorporated those punch cards within the digital program.
Differentiating With Dairy
As it sets its sights on the next 80 years, Weigel’s continues to operate as a family business that leverages its strong dairy history, with Bill Weigel’s son Kurt Weigel, representing the third generation of family management as the director of recruitment. Weigel’s continues to operate its own dairy, where it bottles its dairy products and supports its popular proprietary milk business. “There were 16 dairies in Knoxville when I was young,” Weigel said. “Now we have the only dairy left in the city and the only family dairy left in the eastern half of Tennessee.”
While the c-store industry as a whole targets blue collar men and struggles to gain more female customers, Weigel’s skews more heavily toward the female demographic than the average convenience store. “If you build a nice store that is clean, bright, safe and one of your primary leaders is milk, you tend to get a lot of female customers, but they want a clean store. That’s been, I think, the separation for us, our bright and clean stores and the dairy image makes them feel safe,” Weigel said. “We’ve been doing this for 80 years, so we’re now serving sons and daughters and grandchildren of customers we’ve been serving for a long time.”
At a Glance: Weigel’s Inc.
Stores: 56 units, all in Tennessee
Employees: More than 500
Bill Weigel, Chairman and CEO
Ken McMullen, President
Doug Yawberry, Director of Operations
Mike Del Aguaro, Director of Marketing
Brian Donoghue, Director of Foodservice
Kurt Weigel, Director of Recruitment