Casey’s General Stores Sets Forth Three Main Goals for 2022

ANKENY, Iowa — Casey’s General Stores Inc. has set forth three main goals for 2022: private brand and prepared food expansion, increased customer signups for its Casey's Rewards digital loyalty program, and continued store count growth.

During the 2022 ICR Conference, held virtually on Jan. 11, Casey's CEO Darren Rebelez tackled the latter topic first, noting that the retailer, which currently operates more than 2,400 convenience stores, will focus on both organic growth and mergers and acquisitions.

“The M&A environment is favorable,” said Rebelez, who was named Casey’s CEO on June 24, 2019. “We are looking at both smaller and larger [acquisition] opportunities.”

Rebelez reported that he is pleased with the retailer’s third distribution center, which opened on April 15, 2021 in Joplin, Mo. Hence, a fourth distribution center is not in the near-term thinking. “We can add 1,000 stores with our third distribution center,” he said.

One main reason for the accommodative M&A environment is rising cost pressures in the c-store industry that are difficult for smaller operators to digest, the chief executive noted.

Wage pressures are something Casey’s itself faces, like most other c-store operators, but the Ankeny-based chain has been able to offset the higher operating costs with improved fuel margins, an area where it has placed a huge emphasis the past two years.

Integration of already acquired c-store chains has been seamless, Rebelez added, specifically mentioning 2021’s Buchanan Energy acquisition. “Distribution and the back office have already been unwound,” he said. “Much of the renovation work has been done already.”

Shifting to private brands, Casey’s leader shared the retailer's parameters for its offering of store-brand products: quality of products that is as good or better than national brands at a lower retail price and a higher profit margin.

“Private label has been great for us. When we put our name on a product, it really resonates with our customers. No categories are off-limits for private label with the exception of tobacco,” Rebelez relayed, revealing that the greatest areas of private-label growth recently have been ice cream, chips and packaged bakery.

Zeroing in on prepared foods, which the CEO called “the jewels of the Casey’s business,” the breakfast daypart has seen a comeback after taking a significant hit during the worst days of the COVID-19 pandemic. A focus on bean-to-cup coffee has delivered big results, as has a renovated signature handheld item made with fresh dough.

Regarding the Casey’s Rewards loyalty program, there are now more than 4.2 million members, which exceeded company expectations. “Rewards members visit 15 percent more and spend 6 percent more than non-members,” Rebelez cited. “We are looking to add more personalization of messaging for our loyalty customers.”

As for the future, particularly when it comes to fueling, he stated that Casey's is well-positioned. "Cars are still going to take the same commuting routes. And while fueling up with gas takes five minutes, a rapid EV [electric vehicle charger] takes 30 minutes. With our strong food offering, customers can enjoy a meal while charging,” he noted. 

Casey's currently operates stores in 16 states: Arkansas, Illinois, Indiana, Iowa, Kansas, Kentucky, Michigan, Minnesota, Missouri, Nebraska, North Dakota, Ohio, Oklahoma, South Dakota, Tennessee and Wisconsin. 

The ICR Conference brings together public and private company management teams, institutional investors, sell-side research analysts, investment bankers, private equity professionals and select media to connect with one another with the goal of understanding consumer trends and public-company prospects as the year begins.