Company News

Three Major Growth Opportunities for Casey’s

Will the chain deliver on these ambitious goals?

ANKENY, Iowa -- Three major growth opportunities are on Casey’s General Stores Inc.’s delivery schedule for its fiscal 2016, William J. Walljasper, CFO for the Ankeny, Iowa-based convenience-store chain said during the company’s fourth-quarter 2015 earnings call.

Casey's pizza delivery online ordering foodservice (CSP Daily News / Convenience Stores / Gas Stations)

 “We are very pleased with the performance of the company in fiscal 2015,” said Walljasper. “We are excited about our growth opportunities in fiscal 2016.”

Walljasper laid out the conversion to 24-hour formats, the implementation of a new online ordering program and expanding the company’s pizza delivery program.

  • Online Ordering. Casey’s online ordering program is still new: the company has only been testing the program for three months. But Walljasper said they were “very pleased” with the results. So pleased, that Casey’s plans to roll it out to all of its locations.

“Our goal is to roll out online ordering to approximately 300 stores each month and have it completely rolled out to all our stores by the end of this calendar year,” he said.

Casey’s operates more than 1,850 convenience stores in 14 states throughout the Midwest.

Although early on, the company sees two major benefits to offering online ordering.

“We believe we’re starting to reach a customer that we have not reached before,” said Walljasper. “There are customers that demand this service, no different than when we rolled out pay-at-the-pump years ago.”

He continued, “In addition, there are cross-sale opportunities and prompts through the online ordering. Order a pizza and ask them if they want to add breadsticks. We are seeing an attachment rate, albeit very preliminary, from some of those types of items.”

  • Pizza Delivery. The expansion of Casey’s pizza delivery was admittedly slow in 2015 (just 12 new locations), due in part to a focus on the online ordering program. But Walljasper said the company plans to add as many as 100 delivery locations in fiscal year 2016.

“We typically experience a 20% to 30% increase in prepared food sales upon rollout of the pizza delivery program to a store,” he said.

For the time being, Walljasper said, there are no plans to add other foodservice items to the delivery program, although the company is “willing to modify and look for opportunities.”

For all three initiatives, Walljasper expressed optimism over how Casey’s goes about deciding which programs might work at different stores.

“We run quite a bit of analytics on what we believe will be successful candidates for different initiatives,” he said. “It’s really on a case-by-case basis depending on the market conditions of a particular area. We’re doing a much better job in managing all of these programs and we do have a fair amount of runway in these programs moving forward.”

  • 24-Hour Stores. “The conversion of our stores to a 24-hour format continues to go well,” Walljasper said. “We typically experience a 20% to 30% lift in inside sales from stores converted to this format.”

He added that Casey’s now operates approximately 815 24-hour stores, having converted 110 locations in fiscal year 2015. The company plans to convert another 110 stores to this format in fiscal year 2016, with 50% to 60% of new stores opening up as 24-hour locations.

Click here to view a report on Casey’s fourth-quarter fiscal and yearend 2015.

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