ANKENY, Iowa -- Casey’s General Stores Inc. is trimming its pizza delivery operations by dropping the service altogether at some stores, cutting back the days when delivery will be offered at others and trimming the hours the option will be available at still more. All told, changes were implemented at more than 100 of the 790 convenience stores offering delivery.
Simultaneously, the retailer has decided to go against the trend of quick-service restaurants extending their hours of operation. About 400 Casey’s stores reversed their policies of staying open 24/7, the company reported during its latest earnings call with investors.
The rollbacks in delivery service and hours of operation “came after an extensive hour-by-hour profitability analysis in an effort to determine the optimal hours of operation and delivery offering,” said CEO Terry Handley. “Even though we did experience an adverse impact on same-store sales from these changes, we achieved a significant and measurable reduction in store-level operating expenses.”
Specifically, Casey’s said, net income was bumped up by about $1.5 million from February through April, offsetting a 1.3% decline in same-store foodservice sales.
Not coincidentally, Casey’s labor costs for the quarter rose just 0.3% for stores open at least a year, a nudge compared to the upward pressure reported by many chains recently.
Earlier this year, the c-store chain said it was facing stiff competition in prepared foods. “Everyone is struggling for market share,” Handley said in an earnings call. “Everyone is in a fight, in a battle.” To keep up with quick-service chains’ aggressive promotions, Casey’s launched more targeted marketing capabilities, price optimization initiatives and a retooling of labor and costly initiatives, such as delivery.
The concept’s foodservice sales totaled $1 billion for the fiscal year ended April 30, which would place it 49th on Technomic’s most recent sales ranking of restaurant chains, and make it the industry’s fifth-largest pizza specialist.
Ankeny, Iowa-based Casey’s General Stores has more than 2,000 c-stores in 15 mostly Midwestern states, located primarily in towns with populations of 5,000 or fewer people. The chain ranked No. 4 in a year-end update of CSP’s 2017 Top 202 list of the largest c-store chains in the United States.
Photo courtesy of iStock.
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