Casey's Sees Initiatives Pay Off on the Forecourt
ANKENY, Iowa — In the third quarter of its fiscal year 2020, Casey's General Stores Inc. added several elements to its forecourt toolkit to help the convenience store chain navigate a "challenging demand environment," according to CEO Darren Rebelez.
Speaking during the company's third-quarter earnings call, held March 10, the chief executive reported that Casey's new fuel price optimization and procurement programs helped the retailer achieve an average fuel margin of 21 cents per gallon for the quarter.
Same-store gallons sold were down 2 percent in the quarter, and the average retail price of fuel during this period was $2.40 a gallon, compared to $2.22 per gallon a year ago. Despite the decline in same-store gallons, however, total gallons sold for the quarter were up 3.3 percent due to the strong contribution from new stores opened in the last 12 months, Rebelez said, noting that gross profit dollars in the fuel category also increased 1.4 percent during the quarter.
Year to date, Casey's reported same-store gallons sold were down 2 percent with an average fuel margin of 23 cents per gallon. Through the first nine months of its fiscal year, gross profit dollars in the fuel category were up more than 14 percent vs. a year ago.
"Our effort and price optimization continues to have a positive effect on our overall profitability in the fuel category," Rebelez explained. "During the quarter, we completed the full integration of this tool with our point-of-sale system. In addition to this, we also converted over 300 stores [to] digital price signage.
"We'll be fully converted to digital price signage by the end of the fiscal year," he continued. "This integration and sign conversion will provide us increased flexibility in adjusting retail prices to react more quickly to the rapidly changing fuel environment."
Casey's also made progress on its fuel procurement plan in the third quarter. According to Rebelez, the retailer's contracted fuel volume represents approximately 43 percent of its total fuel volume, and it is on pace to have roughly half of its fuel volume under contract by the end of FY2020.
Casey's fleet card program is gaining traction, too. Over the course of the third quarter, the retailer continued to add new cardholders and the program now has more than 3,100 accounts and is approaching 20,000 cardholders.
"This, combined with our additional efforts and other types of fleet cards, has driven the universal fleet card program [up] 9 percent in the third quarter. We remain optimistic about the potential of all these initiatives going forward," Rebelez said.
Ankeny-based Casey's operated 2,193 convenience stores in 16 states at the close of the third quarter.