ANKENY, Iowa -- As Casey’s General Stores Inc. enters the second half of its fiscal year, expect the convenience-store chain to ramp up acquisitions, new-store construction and major remodels, mainly courtesy of its second distribution center.
Also look for the retailer to launch its long-awaited mobile app to facilitate and expand online ordering.
The company’s annual goal is to build or acquire 75 to 113 stores, replace 10 existing locations and perform 100 major remodels. Thus far, Casey’s has acquired one store and completed 25 new-store constructions, 11 replacements and 24 major remodels.
“We are on pace to build approximately 50 stores and remodel 100 stores by the end of the fiscal year,” chairman and CEO Robert J. Myers said during the company’s earnings call (click here for CSP Daily News coverage of Casey’s second-quarter financials).
With regard to acquisitions, though, Casey’s will be patient, said Bill Walljasper, senior vice president and chief financial officer.
Over the past six or 12 months, acquisitions have been done at very high multiples, Walljasper said, but “we’re not going to overpay for an acquisition just so we can tell someone that we’ve increased the number of units in our business.”
That could mean Casey’s will have to think about organic growth, which it has been doing in preparation for its second distribution center, located in Terre Haute, Ind. The facility is on pace to open in the first half of February.
The second distribution center “will allow us to extend the geography of our search for new sites, not only from an organic perspective but also from an acquisition perspective,” Walljasper said.
The “mileage reach” for a Casey’s distribution center is about a 500-mile radius, he said. That could bring in new states like Michigan and Ohio, as well as the opportunity to expand further east in Tennessee and Kentucky and further south into Arkansas.
But first, Walljasper said, Casey’s must make sure the facility is running efficiently.
The second distribution center will be approximately 275,000 square feet. During the first year of operation, Casey’s plans to transition 30% to 40% of its truck routes to the facility and eliminate all three-day routes and a majority of two-day routes, Walljasper said.
Meanwhile, the retailer will be launching its mobile app soon that will allow customers to order pizza and other fare from their cellphones and other mobile devices. It previously offered online ordering available only from a website, and included only pizza and two-liter sodas. In May 2015, Walljasper said the convenience-store chain would add a mobile app in time for the complete rollout and make sub sandwiches available, as well.
The app, to be released later this month with a comprehensive campaign planned for January, will allow Casey’s to reach more customers.
“That’s where I think you’ll start to see the traction and benefit from online ordering really take hold,” Walljasper said. It’s a service that many Casey’s customers are demanding, he said, comparing it to the rollout of pay at the pump.
“You really need that service to stay competitive. I think this is one of those things that not only do we need to have that to touch more customers that may not be integrating with us, but also driving other sales from a customer,” he said.
Ankeny, Iowa-based Casey’s owns and operates 1,896 convenience stores in 14 states: Arkansas, Illinois, Indiana, Iowa, Kansas, Kentucky, Minnesota, Missouri, Nebraska, North Dakota, Oklahoma, South Dakota, Tennessee and Wisconsin.
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