ANKENY, Iowa – A weak agricultural economy and increasing promotional activity from competitors led to lower customer counts for Casey’s General Stores during its latest fiscal quarter, officials said, contributing to an continuing, value-driven trend in tobacco.
With consumers under financial pressure, the chain of 1,950 stores in 15 Midwestern states has seen movement toward a “value” mindset. In the tobacco category, that means package purchases vs. cartons, while at the same time, people are switching from premium to generic or other discount brands, according to Bill Walljasper, CFO for Ankeny, Iowa-based Casey’s.
Without detailing specific tobacco numbers, Walljasper said total sales in the grocery and the merchandise category were up 4.7% to slightly over $500 million in the company’s fourth quarter. Same-store sales were up 1.5% during the quarter, while still short of the chain’s annual goal primarily due to lower customer-traffic counts.
Casey’s numbers appear to reflect trends revealed during last spring’s NACS State of the Industry conference.
Billy Milam, president of the Atlanta-based RaceTrac Petroleum, said that when the bottom fell out of oil prices in the fall of 2014, the ripple effect resulted in dramatically lower fuel prices at the pump. The end result was consumers on average receiving $700 in fuel savings for 2015. Some of that extra income went to greater spending in the c-store, specifically higher grades of fuel or premium cigarettes. Despite higher in-store profits in 2016, the c-store channel overall is starting to see a shift back to value and discount brands--both in fuel and in tobacco--as fuel prices inch slowly but steadily up.
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