Casey's Lays Out Strategic Plan for Next Three Years
ANKENY, Iowa — After successfully executing its first three-year strategic plan, Casey's General Stores Inc. is ready to tackle the next three years, with expanded food offerings and unit growth slated to play critical roles.
At its first-ever Investor Day in January 2020, Casey's outlined several key pillars of growth for the years 2020-2023: reinvent the guest experience, create capacity through efficiencies and accelerate unit growth — all underpinned by investment in its talent.
Three and half years later, the convenience retailer took to the stage at its June 27 Investor Day to not only detail its progress, but also lay out the roadmap for future growth.
Ankeny-based Casey's is No. 3 on the 2023 Convenience Store News Top 100 ranking.
According to CEO Darren Rebelez, Casey's has achieved well-balanced growth over the past three years. Notably, it saw 5.7 percent inside same-store sales growth and expanded its private label line to more than 300 SKUs from an assortment that previously included just bottled water and some bagged candy.
"It's been a tremendous boom to our business. Today, about 10 percent of our units and about 10 percent of our gross profit dollars in the grocery general merchandise category come from our private label brands," Rebelez said during a media briefing on June 28 following Investor Day. He noted that 120 of those 300-plus SKUs are items only found at Casey's. "They're unique to us. It gives our guests another reason to come to the store."
On the forecourt, the retailer "got sophisticated" around fuel procurement and now has 75 percent of its fuel volume under contract — up from about 4 percent, Rebelez reported.
The chief executive also called out the Casey's Rewards program as another highlight of the past three years. Launched in January 2020, the program now has 6.5 million members, with 60 percent of those members coming to the store on a 90-day basis.
[Read more: Casey's Enhances Mobile Experience for Loyalty Members]
Casey's General Stores By the Numbers
- Third-largest convenience store chain in the United States
- Fourth in liquor licenses among U.S. retailers
- Fifth-largest pizza chain in the United States
- Total enterprise value of approximately $10 billion
- 2,500-plus convenience stores in 16 states
"Our rewards members visit 15 percent more frequently than nonmembers and spend 13 percent more when they do visit. They are roughly 55 percent more profitable than a non-rewards member," Rebelez said. "We spent a lot of time and energy rewarding those members, staying in touch with those members, keeping them engaged and expanding that base of membership."
Charging Ahead
Not one to stand still, Casey's is moving forward with a new three-year strategic plan.
"As we look to the next three years, we felt really good about where we've been and we think we've built a lot of credibility with the investment community," Rebelez said. "We have what I call a really high 'say-do ratio,' which means if we say we're going to do something, then we take that commitment seriously and we feel compelled to deliver on that."
According to its new strategic plan, Casey's is committed to again grow in the top quintile of S&P retailers with EBITDA growth of 8 percent to 10 percent. It intends to get there by leveraging unique guest insights the company did not have three and half years ago.
The three primary strategies in this leg of the retailer's growth are:
- Accelerate the food business. "Pizza is the crown jewel of our business, but we have a lot of opportunity," Rebelez said. "As strong as our food business is, we have a lot of opportunity to expand and to grow that. We're leaning heavier into that in this next three-year plan."
- Unit growth. "We operate 2,500 convenience stores in 16 midwestern states and what I'd like to point out is that with those 2,500 stores in the 16 states, about 2,000 of those stores are in only nine of the states we operate in," he explained. "So, the other 500 are scattered over the seven other states. We have a lot of white space to grow in our existing footprint. And of course, there's a lot more than 16 states in the U.S., so we have plenty of room beyond that."
- Enhancing operational efficiencies. "We've stood up a continuous improvement team at Casey's that's been focused over the last year on removing inefficiency from our stores, from our distribution centers, really from our entire operation," Rebelez said. "They'll continue that work for the next three years to support that effort."
At the base of these three primary strategies stands investment in Casey's enabling foundation, through which the chain will support objectives around data analytics, technology and supply chain — and enhance its team member value proposition.
About the Author
