Casey's Focuses on Price Optimization at the Pump & in the Store
ANKENY, Iowa — Casey's General Stores Inc. is in the process of rolling out fuel price optimization to all of its 2,000-plus locations. The program is part of the retailer's value creation plan, which it set into motion in March 2018.
"Price optimization is another key program in our value creation plan. This will allow us to leverage the sales data generated by our broad network of stores combined with market data to make centralized, rules-based pricing decisions at the pump and in the store, which we anticipate will improve gross profit dollars across all categories throughout our network," Casey's President and CEO Terry Handley explained during the company's fiscal 2019 third-quarter earnings call on March 11.
"We have completed the price optimization pilot in the fuel category utilizing PriceAdvantage and recently began a phased rollout of this program to all stores, with the completion scheduled at the end of the fiscal year," he reported.
Inside Casey's convenience stores, the chain has teamed up with dunnhumby for a price optimization platform for its grocery and prepared foods categories. During the third quarter, Casey's began a test to help identify and finalize the categories that will be used for the pilot, which will continue through the fourth quarter.
A broader rollout of price optimization inside the stores is scheduled to occur in the first quarter of fiscal year 2020, according to Handley. However, he noted that the timing will depend on the pilot program's outcome.
"Price optimization represents a fundamental shift in our marketing process for both fuel and in-store purchases supported by an increased visibility into our pricing and promotion strategy," the chief executive explained. "We are confident in the benefit these programs will bring to the company."
Price optimization is just one prong in Casey's value creation plan. Other key prongs include a new fleet card program, digital enhancements, and controlled operating expenses and capital allocations — all of which saw progress in the company's third quarter, as Convenience Store News previously reported.
"We continue to take transformational steps to enhance store performance and deliver long-term profitable growth," Handley said. "We will continue to review and add skill sets to successfully execute on our strategy to drive significant long-term shareholder value."