Is Wawa Effect Pushing Gas Prices Down In Palm Beach County

Is Wawa Effect Pushing Gas Prices Down In Palm Beach County

Where is the cheapest gas in Palm Beach County? Since three Wawa convenience stores opened last Thursday, it’s likely to be at Wawa, as well as at numerous gas stations within a few miles of those.

The “Wawa effect” is in full force, but it’s not known how long it will last.

“It is not uncommon that when a store enters a new market, that it is hyper competitive on gas prices,” said Jeff Lenard, the National Association of Convenience Stores vice president of strategic industry initiatives.


For example, on Wednesday, regular was priced at $2.17 a gallon at the three Wawas at 3950 S. Congress Ave., and 1771 S. Congress Ave., both in Palm Springs and at 7289 Garden Road in Riviera Beach. That’s well below the county’s average of $2.44 a gallon, down 3 cents from a week ago, according to AAA’s Fuel Gauge Report

But Florida’s average remains unchanged from a week ago at $2.29 a gallon.

The increased competition helps explain why five gas stations in Lake Park within one to three miles of the Riviera Beach Wawa, were also selling gas at $2.17, according to GasBuddy.com. Rocket Fuel, 100 N. Federal Highway, North Palm Beach, was offering regular for $2.15.


A few stations near the Palm Springs Wawas dropped their prices to $2.16 a gallon, and on Wednesday gasoline was also $2.16 a gallon at Costco in Lantana and Royal Palm Beach and at BJs in Boynton Beach.

Wawa’s introductory $1.99 a gallon ended March 25.

The price of gas is still the top reason 51 percent of consumers surveyed say they stop at a particular station, but 16 percent say they choose a fueling location for the quality of its food, a national survey NACS released March 29 revealed.

“The margins on fuel are slim, and the idea is to get them in the store and incent them with a snack, sandwich or drinks,” Lenard said.

In the convenience store business, gasoline accounts for 70 percent of revenue dollars, but only 40 percent of profit dollars, Lenard said.

“Sometimes, a large chain similar to Wawa will enter a new market and use low prices to spread word of mouth to bring in traffic and acquaint customers with their stations/brand,” said Patrick Dehaan, senior petroleum analyst at GasBuddy.

DeHaan added the low prices can last for days or weeks until the ownership is satisfied the brand is established.

“Wawa is likely forgoing profit for the aforementioned reasons. I wouldn’t expect it to be permanent. It’s likely an accepted cost of entering a market,” DeHaan said.

Lori Bruce, spokeswoman for Wawa, Pa.-based Wawa, said: “In new markets, it is our goal to attract new customers, as we are doing that in Palm Beach County with our offer and competitive pricing. In every new market we’ve entered, we’ve increased the level of competition in the market, and that benefits our customers and fulfills our value proposition. We consider fuel as part of our overall unique offer that includes food, fresh beverages, convenience, services and fuel in one experience.”

Inexpensive gasoline is something many consumers seek, and more than half of consumers will drive out of their way to save 5 cents a gallon, Lenard said, even if driving those extra miles doesn’t make sense.

NACS’ survey found that 67 percent of consumers will drive 10 minutes out of their way to save 5 cents a gallon. That’s a 20-minute round trip, and at 30 miles per gallon, equates to burning to half a gallon. If gas is $2 a gallon, the motorist won’t break even, Lenard said.

Even saving 10 cents a gallon amounts to only $1.80 for an 18-gallon tank.

“But there is a real feeling of satisfaction and a real feeling of accomplishment when you are able to, as a consumer, affect your gas prices. There is nothing else like it,” Lenard said “You will not see someone drive out of their way to save 50 cents on milk, bread or eggs.”




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