Groceryshop 2022: Casey's CEO Talks Rewards, Pizza and Private Label
Iowa-based convenience chain Casey’s has rapidly expanded both its store count, and private label and prepared food offerings in recent years.
At Groceryshop 2022, held Sept. 19-22 in Las Vegas, NV, Darren Rebelez, president and CEO of Casey’s, was interviewed by Bonnie Herzog, managing director at Goldman Sachs, and spoke about the convenience chain’s digital innovations, approach to private label and more.
Rebelez cited the Casey’s app and rewards program that was launched in 2020 as a driver of growth for the convenience chain.
“Our digital team set out to do a couple of different things [in 2020],” he said. “We revamped our website, launched a new mobile app, launched our e-commerce platform, and at the same time launched our rewards program. The rewards program is really unique for a couple of reasons. You accumulate points but because we sell so many different things, you can use those points for a lot of different purchases. Points you earn from gasoline, you can use them to buy pizza…”
Rebelez said that in about two and a half years, the Casey’s rewards program has grown to about 5.5 million members. Casey’s operates more than 2,400 stores in 16 states in the Midwest and Great Plains regions.
“Our Casey’s members visit a store 15% more frequently than our non-members and spend about 12% more per visit than our non-members,” he added.
Known for its pizza, Rebelez said that the chain is continuing to expand its prepared food options, and that Casey’s’ pizza has a halo effect on private label products. He added that Casey’s customers, like most Americans, are flocking to private brands as a result of the current inflationary period.
“The pizza platform is the backbone of our e-commerce business… early on, part of our strategy was to expand our private label business,” said Rebelez. “Today, it’s [private brands] about 5.5% of our grocery and general merchandise business, but about 9% of our gross profit dollars for that business. We set a high bar with that program, for any product to get into that assortment it has to meet three criteria: it has to be equivalent or higher quality than the national brands, it has to be at a lower retail price to the consumer, and it has to be at a higher penny profit for Casey’s.”
Regarding the retailer’s future, Rebelez added that he sees a “continued evolution of convenience being important to consumers.”
“In the near term, certainly frictionless checkout is going to be an important piece of that business,” he said. “You can’t have an inconvenient convenience store. We’re going to continue to find ways to remove friction from that experience and continue to deliver a great guest experience."