Casey’s Sees Slow Acquisition Environment in Midwest
ANKENY, Iowa — The acquisition pipeline “has been slow in recent quarters” for Casey General Stores Inc. as most convenience store purchases have occurred outside of its main Midwest operating region, Chief Financial Officer Bill Walljasper reported during the company’s 2016 fiscal first-quarter earnings call Wednesday.
“The majority of c-store retailers in the Midwest are owned by companies with 10 stores or less,” he said. “There has been a strong retail fuel environment [recently] and they have not had a lot of incentive to sell.”
If the environment changes, Walljasper said Casey’s will opportunistically seek out potential acquisitions.
In the meantime, the Ankeny-based c-store retailer plans to place an emphasis on its in-store and forecourt operations. By the end of its 2016 fiscal year, ending April 30, Casey’s expects to convert an additional 100 stores to its pizza delivery program and complete 100 major remodels, the CFO stated.
In addition, Casey’s continues to roll out its online ordering program. Online ordering is now available at more than 600 stores, and the retailer expects all of its 1,887 company-operated stores to offer the option by the end of the 2015 calendar year.
Online ordering has not had a big impact on Casey’s earnings thus far, as the company has yet to launch a marketing campaign to promote this new offering. However, Walljasper did note that customers are spending more on average for merchandise ordered online compared to what is spent for in-store transactions.
AT THE FORECOURT
Shifting the focus to outside the c-store, the Casey’s executive announced the retailer recently renewed its Fuel Saver Program with grocery chain Hy-Vee Inc.
For areas not covered under this agreement — primarily Casey’s stores in Indiana, North Dakota, Kentucky and Tennessee — the company will soon reintroduce its Pizza at the Pump program, which entitles customers to receive 10 cents off per gallon when ordering a large pizza, Walljasper revealed.
When questioned by Wall Street analysts, he also reported that Casey’s second distribution center is on track to open in Terre Haute, Ind., in February 2016. The company also looked into the possibility of spinning off some of its assets into a master limited partnership earlier this year, but Walljasper confirmed Casey’s decided against any such action for the foreseeable future.
For a complete rundown of Casey’s 2016 fiscal first-quarter earnings for the period ended July 31, click here.