1. Channel: Convenience

Pizza, Pizza, Pizza, Drives Casey’s General Stores Success


does leave clues and at
Casey’s General Stores once again it was Pizza,
Pizza, Pizza that drive a strong first quarter, marked by an uptick in inside
sales; you guessed it driven be pizza sales. 
Regular reader of this blog know that Steven Johnson Grocerant Guru® at Tacoma, WA
based Foodservice Solutions® was the first to report how pizza would transform
Casey’s General Stores and it has.

this, once again for the first quarter of its 2024 fiscal year, Casey’s saw
inside sales drive inside gross profit dollars up more than 10 percent to $556
million. The company generated $169 million in net income, an increase of 11
percent, and $316 million in EBITDA, an increase of 8 percent from the prior

President and CEO Darren Rebelez
reported during the company’s
earnings call on Sept. 12 that the Ankeny-based convenience retailer saw
notably strong performances in whole pizza pies and bakery, as well as
alcoholic and nonalcoholic beverages.

team, with support from our supplier partners, continues to find the right
product mix and promotional activity to drive sales and profitable results, he

same-store prepared food and dispensed beverage sales were up 5.9 percent, or
14.8 percent on a two-year stack basis, with an average margin of 58.2
percent. Helping fuel those numbers was the introduction of 
thin crust pizza in June. Well-known for its
pizza program.  Now this is important,
Casey’s is the fifth largest pizza chain in
the United States.

continued, “This addition to the lineup has been a great success and
demonstrates the blueprint for innovation at Casey’s. Our guest insights team
identified a gap in our menu. Our culinary team created a delicious product.
Our marketing team worked with our advertising partner to create a great
marketing campaign and, ultimately, our operations team brought [it] to life in
our stores and communities across our footprint,” ….. “I think the
results speak for themselves. This type of strategic innovation and teamwork is
something that will help us achieve our goals for the three-year strategic

there is more, same-store grocery and general merchandise sales also ticked up,
recording a 5.2 percent increase for the quarter, or a 11 percent increase on a
two-year stack basis, with an average margin of 34.1 percent.

beverages, Casey’s saw “fantastic results” in the energy drink
segment, and alcoholic beverages performed well as the retailer continues to
leverage its competitive advantage of having approximately 1,500 stores with
liquor licenses, the chief executive said.

the forecourt, same-store gallons sold increased 0.4 percent with a fuel margin
of $0.416 per gallon. “Our fuel team is striking the right balance between
margin and gallon volume and the results speak for themselves,” Rebelez
added. “This quarter marks the ninth quarter in a row with fuel margins
above $0.345 per gallon and four of the last five quarters have been over $0.40
per gallon.”

total revenue for the quarter was $3.8 billion, a decrease of $585 million or
13 percent from the prior year due to the lower retail price in fuel, according
to Chief Financial Officer Steve Bramlage. Total inside sales for the quarter
were $1.4 billion, an increase of $103 million or 8 percent from the prior

Fresh Food Helps Drive brand’s Forward

the Q1 numbers, Rebelez called out notable highlights from the past few months:

agreement to acquire 62 c-stores from EG America, a subsidiary of EG Group;

unveiling of Casey’s refreshed app; and

growth of Casey’s private label lineup. 

off to an extremely strong start to our fiscal year in our three-year strategic
plan. Our M&A [merger and acquisition] and real estate teams have been hard
at work as we’re very excited about the pending acquisition with EG Group and
their 63 stores in Kentucky and Tennessee,” Rebelez said. “These
stores are located in rural and suburban markets, and we look forward to
bringing more of our delicious pizza to Kentucky and Tennessee. It is
complementary to our existing footprint and within our distribution center’s
radii, further leveraging our scale and infrastructure.”

August, Casey’s reached 
a deal to acquire the 63 stores, which
currently operate under the Minit Mart and Certified Oil banners, from EG
America. The two retailers expect the transaction to close later this year
subject to customary regulatory approvals.

late spring, Casey’s launched an 
enhanced mobile app experience for its
loyalty program, which includes a refreshed design that makes it easier for
Casey’s Rewards members to track their points, redeem rewards and see how much
money they’ve saved by shopping with the program.

program is nearing 7 million members, and we’re excited to see the way our
value proposition is resonating across the Midwest,” Rebelez said.
“Our guests have also gravitated to our private label products and we
exited the quarter approaching 350 items in the assortment with over 40 new
items in the pipeline for the remainder of the calendar year.”

to the chief executive, the retailer’s private label lineup achieved nearly 10
percent unit share and more than 10 percent gross profit share in the first
quarter, with same-store sales up 26 percent.

Success does leave clues. One clue that time and time
again continues to resurface is “the consumer is dynamic not static”.  Regular readers of this blog know that is the
common refrain of
Steven Johnson,
Grocerant Guru® at Tacoma, WA based Foodservice
®.  Our Grocerant Guru® can help your company edify your
brand with relevance.  Call 253-759-7869
for more information. 

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