The Des Moines, Iowa convenience retailer plans to increase the company’s pace of acquisitions, roll out a broader digital platform and reduce operating expenses in the coming fiscal year.
Bonnie Herzog, managing director–beverage, household & personal care, tobacco and c-stores for Wells Fargo Securities LLC, came away from Casey’s General Stores’ Investor Day meetings in Des Moines, Iowa last week with the sense that the convenience retailer has an increased sense of urgency to focus on company objectives. Among the high points are:
- Accelerating Unit Growth – After missing its 4-6% unit growth target for several years, CASY’s management team has a renewed focus on hitting its target, particularly in light of soft traffic trends.
On several occasions, Casey’s indicated it needs to improve its messaging to the industry that it is willing and able to acquire assets including outside its geographic footprint) similar to examples those by competitors (including Holiday SuperStores, acquired recently by Canadian convenience store giant Alimentation Couche-Tard and PDQ, which was just acquired by Kwik Trip Inc. of La Crosse, Wis.).
Further, the retailer is focused on the large number of small town communities in its current and new markets that it has yet to enter, particularly Illinois and Wisconsin, according to Herzog.
- Improving the Digital Platform and Consumer Engagement – Given lighter traffic in stores, CASY articulated the need to drive improved loyalty and engagement through digital platforms, said Herzog.
- Addressing Rising Operating Costs – Like other retailers, operating expenses are one of Casey’s biggest challenges as labor costs have risen fast, Wells Fargo expressed concerns to what extent cuts in labor and ad spend could further pressure top-line growth at the Casey’s.