"We have taken numerous price increases throughout the prepared food category," CFO Bill Walljasper said during an earnings conference call earlier this month. "We anticipate the impact of these increases to be approximately 3% to 4% on total sales."
The increases [image-nocss] include, among others:
Adding 10 cents to the cost of a slice of pizza. Adding 10 cents to the cost of doughnuts and cookies. Adding 4 cents to the cost of refillable coffee. "It is a wide variety of products," Walljasper said. "There's quite a few items across the board. We are not taking price increases on the whole pie.... It's just a little bit here, [a little bit there]. Not one particular item necessarily is deriving the majority of the 3% to 4% anticipated increase that I mentioned."
Walljasper said with cost pressures, including some raw-product contracts that expired recently, and periodic surveys on competitive pricing, Casey's is aiming to stay "in tune with the competitive landscape on key products."
"We believe there is an opportunity even with the economic downturn that we've experienced for quite some time to see some price increases and not have elasticity in those prices," he said. The rice increases "went into effect March 1, and we'll keep our eye on unit movement from that point forward."
He added, "It is a combination of looking at 1.) the cost pressures within each particular product line, but also, and probably more importantly, 2.) looking at the competitive landscape of those product lines in our market area."
"We certainly don't want to price ourselves out of the market, but you roll everything up and look at the total prepared-food sales, keeping everything constant, [and] we anticipate somewhere 3% to 4% lift in the sales due to the price increases on a go-forward basis until we lapse it next year," he said.
Ankeny, Iowa-based Casey's General Stores owns and operates 1,507 convenience stores in nine states.
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