Ready to Grow

Casey's sees opportunities for store-count,foodservice expansion

By 
Steve Holtz, Editor in Chief, CSP Daily News

ANKENY, Iowa -- With 15 pending acquisitions at the oral-agreement stage, Casey's General Stores is optimistic its fiscal 2010, which began May 1, could provide ample opportunities for growth in both store count and its foodservice program.

"Over the last year, we have started to see seller expectations come down into what we believe is a more reasonable range," said Bill Walljasper, Casey's senior vice president and CFO.

Speaking on a quarterly earnings call yesterday (click here for previous CSP Daily News coverage), Walljasper said the Ankeny, Iowa-based company acquired 16 stores and completed 16 new-store constructions in fiscal 2009. For 2010, the company has set its sights on growing by 4%, or about 60 stores.

"You can probably anticipate about 20 or 25 new-store constructions and hopefully the remaining part will be acquisitions," Walljasper said, noting that Casey's has oral agreements in place now for 15 purchases, including "one medium-sized chain--a smaller chain--and the rest are onsies-twosies."

The chain also tore down and rebuilt 16 stores in fiscal 2009. In the current fiscal year, 20 stores are earmarked for reconstruction.

The number of stores ultimately opened, redesigned or purchased also will guide the growth of Casey's prepared-foods program. While pizza and doughnuts anchor the program, a relatively new interest in made-to-order sub sandwiches is slowly making its way into more stores.

"We only have it in 30 or 40 stores right now. We certainly are looking to expand that in fiscal 2010," Walljasper said, noting that any new-build or rebuilt stores will likely include space for the sub program. "We don't have a lot of information to give out with regard to the success [of the sub program], but I can tell you that we're very encouraged by the results of that program."

Other foodservice changes are coming, as well.

"We always have a number of items in test," Walljasper said. "Some of the things that you can anticipate in 2010: We're going to roll out another 200 to 300 iced-coffee machines and another 200 to 300 10-head fountain machines to replace some older six-head machines. Both of those endeavors have been very successful for us. Also, we're looking to introduce products such as dessert pizza."

In 2009, same-store sales in the foodservice/fountain category were up 9.1% in Casey's stores. "This sales growth was due to continued popularity of our prepared-food program and strategic price increases," Walljasper said. "These price increases represented approximately 3% to 4% of the same-store sales numbers."

The retailer operates 1,474 corporate stores in Iowa, Illinois, Indiana, Kansas, Minnesota, Missouri, Nebraska, South Dakota and Wisconsin.

Steve Holtz, CSP/Winsight By Steve Holtz, Editor in Chief, CSP Daily News
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