Wawa Gets Philly to Change New Tobacco Regulations

Wawa, whose business model relies in part on foot traffic from smokers, had threatened to halt its expansion if proposed regulations weren’t amended.

Wawa cigarette counter

The cigarettes for sale behind the counter at the new Wawa at 20th and Market streets | Photo: Dan McQuade

You might see more outlets selling cigarettes in Center City sometime soon.

The Philadelphia Board of Health last night approved new limits on tobacco sales in the city. But the Inquirer reports that the board tweaked its plan in response to a complaint from Wawa. Last week, the Philadelphia Business Journal reported Wawa had threatened to cease opening stores in the city due to the proposed regulations.

The board’s original plan had called for the number of outlets allowed to sell cigarettes in an area to be determined by residential population. Thanks to Wawa’s lobbying, that will now be based on “commuter-adjusted daytime population.” That means there will be more licenses available downtown for Wawa, which has its sights on at least two more stores in Center City. Wawa, which was not the only business to take issue with the new restrictions, did not immediately return a request for comment.

Wawa has long credited the sale of cigarettes for its success. In his book The Wawa Way, former company CEO Howard Stoeckel discusses how the company turned around lagging sales in the early 1990s in a chapter titled “The Dark Days.” It slashed cigarette prices, lowering its profit on smokes from 55 cents a pack to just 11 cents a pack.

“We went big and bold in Allentown, buying billboards everywhere: ‘LOWEST CIGARETTE PRICES ALLOWED BY LAW,’” Stoeckel writes. “We took out full-page newspaper ads with the same message. The test paid immediate dividends as customer count grew. Not only did we sell enough cigarettes to recoup our lost gross profit, but those customers were coming in and buying our food service products.” Wawa quickly rolled out the plan to all stores. “Within one year,” Stoeckel continues, “from the first quarter of 1991 to the first quarter of 1992, traffic went up 14.7 percent.”

Another change in the regulations prohibits a retailer from opening within 500 feet of a school; current retailers will be grandfathered in, but will not be able to sell their tobacco license. The cost of a license was also raised from $50 to $300. Retailers that are caught selling cigarettes to children three times in two years will have their license suspended for a year.

The new guidelines were initially proposed in September. They will go into effect on February 15th.