Casey's Focuses on Food as It Maps Out Future Growth
ANKENY, Iowa — Casey's General Stores Inc. is the third-largest convenience store chain in the United States, a well-known fact. It is also a well-known fact the convenience retailer is famous across the Midwest for its pizza. But what may not be as widely known is the fact that Casey's is the fifth-largest pizza chain in the U.S.
President and CEO Darren Rebelez often refers to the pizza program as Casey's "crown jewel." So, it should not be surprising that the retailer is giving pizza — and the food category overall — a starring role in its new three-year strategic plan for growth.
The three primary strategies for this next stretch of Casey's journey are: accelerating the food business, including prepared foods, dispensed beverages and grocery; growing its store count; and enhancing operational efficiencies.
[Read more: Casey's Lays Out Strategic Plan for Next Three Years]
The Ankeny-based chain revealed the new strategic plan during its Investor Day in New York on June 27. Casey's operates more than 2,500 convenience stores across a 16-state footprint and sits at No. 3 on the 2023 Convenience Store News Top 100 ranking.
"We're going to accelerate our food business. As I mentioned before, pizza is the crown jewel of our business, but as strong as our food business is, we have a lot of opportunity to expand and to grow that," Rebelez said. "We're leaning heavier into that in this next three-year plan."
Grocery Acceleration
Casey's has seen "a tremendous amount of success over the past few years driving both top and bottom lines with grocery and general merchandise," noted Brad Haga, senior vice president of prepared foods and dispensed beverages.
Three years ago, with the launch of its initial three-year strategic plan, Casey's priority was to get its assets and space allocation right across the network to enable the chain to scale programs. "Back in October of 2020, we reset over 2,000 stores in just 45 days with new extended gondolas enabling space for 200 additional SKUs, many of which are private brands," Haga explained.
Additionally, Casey's reset category locations with more appropriate adjacencies. For example, the retailer moved packaged bakery items close to the coffee station.
Next up was getting the right products into the stores. "Our approach with grocery was to strive for differentiation. Much like Casey's pizza, we have differentiated on many fronts and partnered with many great suppliers like Pepsi to bring exclusive products to market like Casey's own Mtn Dew Overdrive, which quickly rose to being a top-selling SKU in our beverage assortment," Haga said.
Casey's private label brands have been a differentiator as well for the retailer. Private label now has more than 300 SKUs and 10 percent share penetration of units and dollars.
Prepared Food Acceleration
Casey's prepared food business sits on a strong foundation, according to Haga.
Over the past year, the retailer stood up a product development stage process that is rooted in design, ensuring that it is focused on the guests and building scalable solutions that deliver incremental growth to the business. As a result of this process, Casey's found success with products such as its BBQ Brisket Pizza, the Ultimate Beer Cheese Breakfast Pizza and its latest introduction, Casey's Thin Crust Pizza.
In the effort to further accelerate its food program, Casey's will work in three distinct verticals:
- Blocking and tackling the business, which will include managing the product assortment, managing price and promotion, and managing placement.
- Building a new muscle and new capability.
- Optimizing the guest experience and driving breakthrough awareness of key initiatives via the omnichannel market.
"To do more in the future with food, we must start with simplifying and streamlining what is asked of our kitchen. This starts with understanding what tasks need to get done in stores and those tasks that don't add value," Haga explained. "If there's something that can be done upstream from a store that optimizes quality and cost, we will evaluate and work to remove that task from a store. Things that are true differentiators that a guest values like making original Casey's pizza crust from scratch every day, we will keep doing in stores."
[Read more: Casey's Shares Its Recipe for Success]
New items are also top of mind. "There's a lot of data that suggests we have some big opportunities to develop new sales layers that really complement our core pizza business. Some of those include apps, sides, shareable desserts," he said.
"We'll also put a major focus against optimizing our dispensed beverage business and we will strive to be 'Casey's good' in all of these areas," Haga continued. "[At] the end of the day, whatever we do, we must work to prove out the incrementality of our efforts before scaling. That we know."
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