Casey’s General Stores, which operates over 2,500 convenience stores in 16 states, has decided to further its growth by focusing on food as its key offering and adding at least 350 stores to its footprint by the end of its 2026 fiscal year.
Casey’s plans to add 110 of these new stores in fiscal year 2024.
The c-store chain has ended its 2023 fiscal year with a net income increase of 31.5% to $446.7 million and an earnings before interest, taxes, depreciation and amortization increase of 18.9% to $952.5 million.
Eighty-one new stores had been added in fiscal year 2023, and its private-label line for its grocery and general merchandise items saw an over 9% uptick in unit sales and gross profit.
Casey’s hopes to position itself in the top 20% of retailers with its new strategic plan.
“With a long-standing track record of performance, Casey’s has built a strong foundation with momentum to drive strategic value for the next three years and beyond,” said Darren Rebelez, president and CEO of Casey’s, in a presentation.
According to the presentation, its three-year strategy is built on the ideas of expanding its footprint, prioritizing its foodservice and continuing to enhance operational efficiency.
Casey’s Expansion
Over the next three years, Casey’s expects to have an 8-10% compound annual growth rate and single-digit increases in in-store sales and fuel gallons.
Casey’s expects half the growth to occur through menu innovation, further digital engagement, fuel procurement, supply chain efficiency and optimal pricing strategies considering inflation, among other initiatives. The other half will be through unit growth.
Casey’s hopes to add 350 stores to its banner, both via acquisitions and new builds, by 2026.
The chain’s acquisition targets are stores with little foodservice and a lack of a loyalty program, among other characteristics. With these stores, it then plans to integrate its food program, centralized support, digital engagement and its private-label line.
When considering new builds, Casey’s is flexible with its store formats, able to implement a smaller 3,200-square-foot prototype for rural communities, a 5,000-square-foot prototype for suburban communities and a 7,800-square-foot prototype in a travel center style for interstate and highway locations.
“When we seek new locations, we have a robust set of tools to ensure that we leverage data and invest in the right locations,” said Kendra Meyer, vice president of real estate. “Our overall strategic network plan utilizes a market attractiveness scale in conjunction with predictive analytics, and other data sets, to mitigate risks and drive performance in new locations.”
Food and Digital Enhancement
Casey’s plans to rely less on tobacco while investing further in digital and food, which have so far both led to increased recognizability among customers. Part of this plan is also to expand its private-label line. Casey’s has over 300 private-label products.
“Casey’s investment in food and technology lead to a more favorable inside mix, driving higher profit margin rates,” said Rebelez.
The chain has had success with its foodservice in the past, and it plans to further that success through innovation. Experimenting with pizza crusts, expanding its fried foods assortment, optimizing dispensed beverages and working with new dayparts are all potential food focuses.
On the digital side, Casey’s will refresh its Rewards opportunities. The chain is adding new features to its loyalty program to engage customers. Already, “more than a third of Casey’s transactions come from our loyalty members,” said Tom Brennan, chief merchandising officer.
Additionally, to further increase speed, it is integrating artificial intelligence in a voice ordering service for the kitchens. The chain also means to optimize delivery and pickup, evolve its kitchen assets and automate production planning.
“To enable Casey’s to do more in the future with food, we must start with simplifying and streamlining what is asked of our kitchens,” said Brad Haga, senior vice president of prepared food & dispensed beverage.
Store Optimization
Casey’s plans to simplify its stores by using more contemporary technology and a modern workforce management platform.
As with other c-store chains, Casey’s will continue adding self-checkout for faster service.
Inventory optimization is another goal, whereby the chain plans to enhance store-level inventory management and integrate space planning technology.
Finally, Casey’s approach to success includes modernizing its stores with smart systems, such as Smart Safes, smart environmental systems and a digital media network.
“Our goal is not only to lower operating costs, but to improve the guest and team member experience,” said Ena Williams, chief operating officer.
