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09/08/2021

Casey’s revamped own brands grow share of grocery in Q1

Retailer’s release of more than 140 private brands show immediate impact in company’s grocery and general merchandise sales; company also introduced handmade breakfast items.
Dan Ochwat
Executive Editor
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Casey’s General Stores attributed a good part of its successful first quarter report to the introduction of more than 140 revamped Casey’s private brand products that began hitting stores last year.

The newly designed products — matching its recently improved logo — helped grow inside store sales at the convenience chain during the quarter, reaching 4.4% share of total grocery and general merchandise sales for the three-month quarter ending July 31. The category as a whole was up 7% for the quarter vs. a year ago. Same-store sales for the period were up 8%.

This is another big leap for Casey’s private brands. In the previous fourth-quarter call, Casey’s highlighted a private label mix representing only 1% of its inside sales at the beginning of January 2021, but by the end of that month surpassed 3% penetration of inside sales, exceeding its goal of 2%, per the company’s Q4 report. The goal within the next two to three years is to reach an industry average of 10% penetration of inside store sales.

 

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Ankeny, Iowa-based Casey’s General Stores reported record financial results overall for the three months, including a total inside gross profits increase of 16.7% to $463.5 million vs. a year ago. It was an all-time high gross profit quarter for the company, Darren Rebelez, president and CEO of Casey’s said during the earnings call.

Looking closer at the inside store sales, for the three months, grocery and general merchandise was up 7% for the quarter vs. a year ago, and prepared food and dispensed beverages were up nearly 11%. Packaged beverages were up 17% on a two-year stack basis, Rebelez said, and the chain’s renowned pizza slices were up 29% for the quarter.

Casey’s said in the financial report that inside same-store sales were driven by strong performance in packaged beverages, grocery items such as salty snacks and meat snacks, as well as a resurgence in pizza slices, driven in part by improved guest traffic. Inside margin was positively impacted by mix shift, both within and across categories, and procurement initiatives. 

“Casey’s achieved strong financial results in the first quarter,” said Rebelez. “Total revenue was up across the board as guest traffic returned throughout the quarter. Inside gross profit was up almost 17% due in part to the merchandise resets and strategic sourcing initiatives the company implemented earlier this calendar year. We welcomed the team members from the Buchanan Energy and Circle K acquisitions to the Casey's family and integration activities are well underway. Our balance sheet remains strong, and we are confident in our ability to achieve the previously stated fiscal 2022 outlook.”

New Breakfast Items
Looking to build up its morning prepared foods and beverages, on the heels of the first quarter report, Casey’s also introduced handmade breakfast items to its more than 2,300 stores.

The items are the first-ever handmade breakfast items from the company, joining its previously launched breakfast pizza and coffee selection.

 

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The Signature Handheld breakfast sandwiches elevate the retailer’s morning options with a handmade, portable breakfast option that starts with Casey’s made-from-scratch dough that wraps around warm eggs, sausage or bacon, and two types of cheese that is then baked fresh in the kitchens 

The other brand-new menu items include: a Loaded Breakfast Burrito with eggs, shredded potatoes, bacon and sausage crumbles and topped with cheese; and a Loaded Breakfast Bowl with eggs, bacon, sausage, shredded potatoes and cheese all in an energy-packed bowl. Additionally, Casey’s introduced new bean-to-cup coffee, a fresher brew process that instantly grinds beans in six different flavors on demand.

“Casey’s has always set an early morning alarm to start the coffee and roll out our made-from-scratch dough. Now we’re serving new and improved breakfast items and bean-to-cup coffee that will ‘wow’ our regular guests and attract new ones,” said Tom Brennan, chief merchandising officer. “Anyone looking for a fast, easy and delicious breakfast can find that at Casey’s. We’re here to make mornings even better as our guests return to school, work and other routines.”

Michelle Wickham, vice president of prepared food at Casey’s, added: “Our goal with the new lineup is to make our guests days better with fresh coffee and a warm, delicious breakfast that fits easily into their morning routine. Our signature handheld is hearty, cheesy and portable. It’s so special we had trouble coming up with a name for it, so maybe our guests can help. And, I have to say, the loaded burrito and loaded bowl are packed with flavor and very satisfying which is what our guests want.”