Casey's Looks Forward as Current Growth Initiatives Progress


ANKENY, Iowa — There are no slowdown signs when it comes to Casey General Stores Inc.'s strategic growth and expansion initiatives.

Casey's opened 13 new-store constructions, completed seven replacement stores, and acquired eight stores during its recently completed third quarter of fiscal year 2017, President and CEO Terry Handley announced during the company's earnings call on March 7. The convenience store chain also completed 32 major remodels during the quarter. 

At the end of the latest quarter, the number of Casey's stores in operation totaled 1,954.

Casey's intent is to increase its number of new stores on an annualized basis, Handley noted, adding that the company has brought on new associates and enhanced its real estate team to contribute to this effort.

On March 17, Casey's will open its first new store in Ohio. The retailer continues to seek growth opportunities in Oklahoma, Arkansas, Tennessee and Kentucky, as well as Nebraska, South Dakota and Minnesota. Casey's will also take a concentrated approach to growth in the state of Wisconsin.

Playing a calculated role in the company's growth is Casey's second distribution center in Terre Haute, Ind., which opened in February 2016. Among the second distribution center's benefits is its ability to open up new geographies to increase Casey's footprint and accelerate unit growth, Handley cited.

"We are accelerating our store development efforts and have a robust and growing new-store pipeline, which will benefit from leveraging our second distribution center in Terre Haute. I'm encouraged by the progress we have made over the past several quarters in this area and believe we are positioned very well for future growth," the chief executive stated. 

In addition to new-store constructions, Ankeny-based Casey's is in continuous pursuit of acquisitions that fit its business model. 

At the end of the third quarter, the company had 100 sites under agreement for acquisition, Handley noted, explaining that Casey's considers a site under agreement to be either a written contract or a verbal agreement to purchase. Casey's also has an additional eight acquisition stores currently under contract to purchase. 

Meanwhile, 33 new stores and 21 replacement stores are under construction. Casey's is on track to complete an additional 46 major remodels during the remainder of the current fiscal year, bringing the total to 102.

"We are encouraged by the growing pipeline of new-store constructions," Handley said. "We have and will continue to take steps toward resources in order to sustain a higher number of future new-store constructions, while remaining focused on acquisition opportunities."


Along with unit growth, Casey's remains laser-focused on the expansion of its 24-hour format and pizza delivery stores, as well its mobile app and online ordering.

Year to date, the retailer has converted 89 locations to the 24-hour format and 134 stores to the pizza delivery format. In total, Casey's has 997 stores open 24 hours and 552 that deliver pizza.

According to the retailer, the pizza delivery rollout in smaller markets has increased by 40 comp points. To keep excelling with this foodservice program, Handley said Casey's will stay proactive and "vigilant with regards to combo-type promotions" of its competitors on a case-by-case, market-by-market basis.

Casey's is likewise "encouraged" by gains in its online ordering program. Subsequent to the rollout in January 2016, mobile app downloads for the c-store retailer have exceeded 700,000 and that figure continues to grow.  

The total number of pizza orders completed online climbed 13 percent and increased the basket ring of an online order by more than 20 percent vs. a telephone order.

"We are optimistic that contribution will continue to grow as the number of downloads of our mobile app increases," Handley expressed. "We believe our mobile app was a great first step into ongoing digital engagement with our consumers. As we head into fiscal 2018, we'll be very focused on increasing these efforts."

Casey's is beefing up its marketing strategy surrounding foodservice as the company encroaches on fiscal 2018. One way is through integration of the company's loyalty/rewards program and making sure the sophistication of the program is scalable moving forward. During the back-half of 2018, Casey's additionally will amp up the engagement of its mobile app and online ordering process.

New pizza flavor profiles may be on deck as well in the fourth quarter of fiscal 2017 or in fiscal 2018. And yet another area of opportunity Casey's is looking at is take-and-bake pizza, which the company intends to test in fiscal 2018.

"If it meets our expectations, we will move forward with it," Handley concluded.

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