(Casey’s photo)
The Ankeny-based Casey’s convenience store chain reports its gross profit rose in the just completed fourth quarter by nearly 9% compared to the previous year.
President and CEO Darren Rebelez says their in-store sales were up, while the fuel gallons remained flat. He says they are starting to see a few changes in what’s been a tough economy. “We’re expecting the inflationary pressure that we’ve experienced over the last year and a half to settle down a bit. We’re currently experiencing some favorability on cheese costs as an example,” he says.
While fuel gallons sold were flat, Rebelez says others in the region saw a drop, so they did not see the decline that others did. “One of the dynamics that we’re seeing that’s impacting gallon volume is a softness in diesel fuel volume, and that’s really a result of what we’ve seen happen in the economy over the last few months with softening retail sales, construction starts kind of slowing down. And so you’re just seeing less trucks on the roads,” Rebelez says.
The company saw an increase in sales of its private brand products in stores, which Rebelez says is due in part to the impact of inflation on other brands. “The price increases that we’ve taken from the national brands over the past year have really put a spotlight on the value proposition for private brands,” Rebelez says, “it has really widened that price delta between the two. And so, as consumers get a little more penny pinched, they’re starting to look for those private brands.”
Rebelez says three-quarters of its customers make $50,000 or more, and they have not made many changes in their buying habits. “With a group that’s that other 25 percent call it that’s earning less than $50,000 a year, we are seeing some shifts,” Rebelez says. “Certainly shifting more towards the private label, reducing some of the discretionary purchases, think lottery and some ice cream novelty, that sort of thing. But they’re also shifting those purchases over to more affordable indulgences like candy.”
For the fiscal year, Casey’s reported net income increased 31.5% to nearly $447 million. The company added 81 new stores in the fiscal year, ending the year with 2,521 stores.
