Pizza has been Casey’s General Stores’ calling card since the convenience retailer started making homemade pies back in 1984. Since then, Casey’s has consistently evolved its menu, whether through offering thin and gluten-free crust varieties or specialty options like breakfast and taco pizzas. As of late last year, Casey’s was the fifth-largest pizza chain in the U.S. by number of kitchens.
While Casey’s will continue to focus on its pizza moving forward, its pies aren’t the only contributors to the company’s strong foodservice sales.
This past quarter, Casey’s inside same-store sales increased 4.1% compared to prior year, while its total inside gross profit increased 11.3% during the same time frame, according to its fiscal third quarter earnings report released on Monday.
This growth was spearheaded not just by Casey’s pizza, but also by its hot sandwiches and dispensed beverages, as well as non-alcoholic and alcoholic beverages, President and CEO Darren Rebelez said during the company’s earnings call on Tuesday. Casey’s whole pies and bakery products were also both up about 11% during the quarter, Rebelez said during the call.
Casey’s entire prepared foods program, not just its pizza, is its strength — and gives the company a “unique, competitive advantage” in the c-store industry, Rebelez said.
“Prepared food continues to be a key differentiator for Casey’s,” he said.
On the hot sandwiches side in particular, Casey’s recently rolled out a new lineup of chicken sandwiches and burgers that “guests are already gravitating towards,” Rebelez said. These items included a crispy chicken, spicy crispy chicken, quarter pound angus beef burger and breaded pork sandwich, the last of which is an updated version of a menu mainstay.
Casey’s was able to increase the quality and negotiate “better cost of goods,” with these items, allowing it to raise prices by about 50 cents per unit, which has “accelerated” their velocity, Rebelez said.
But even with these price increases, Casey’s hot sandwiches are still “significantly below” the price of a comparable sandwich at most QSRs by “a couple of dollars,” Rebelez said. The affordable pricing is something Casey’s also uses to draw customers to its prepared food offerings.
Casey’s did a soft launch of these items in January, and officially debuted them at all stores last week.
“With respect to innovation, I think we're really starting to hit our stride, and this quarter had some impact with our chicken sandwich and burger platforms,” Rebelez said. “That innovation can really not only have an impact on the velocity, but also have an impact on the margin at the same time.”
Ankeny, Iowa-based Casey’s General Stores operates more than 2,600 convenience stores in 16 states.
