Dive Brief:
- Casey’s General Stores expects to test a dual foodservice program in some CEFCO Convenience Stores’ locations before it fully integrates the newly acquired company, Darren Rebelez, chairman, president and CEO of Casey’s, said during the company’s fiscal second quarter earnings call on Tuesday.
- Rebelez said that Casey’s will “quickly remodel a few” CEFCO locations to feature both brands’ foodservice programs to help Casey’s leadership understand how these offerings perform together. Their findings will then be applied to the rest of CEFCO’s stores, Rebelez added.
- Casey’s $1.1 billion acquisition of CEFCO’s 198 convenience stores closed during the quarter. While Rebelez had previously shared intentions to rebrand nearly all CEFCO locations, he clarified on Tuesday that this process will take three to four years as Casey’s undergoes permitting processes and develops its integration strategy.
Dive Insight:
Rebelez has been upfront about Casey’s plans to quickly add its own food program — headlined by its homemade pizza — into CEFCO’s stores. When the deal was announced in July, Rebelez said that Casey’s would spend about $150 million remodeling CEFCO’s stores, including adding new kitchens in about 85% of these locations.
But Rebelez’s comments to investors on Tuesday indicate that the Ankeny, Iowa-based company may take things a bit slower than planned. He added that Casey’s wants to get a solid understanding of how its food program and CEFCO’s proprietary offering perform together so leadership can have “an informed scope of work to apply to the rest of the chain.”
“They had a pretty successful food program, and obviously we have one as well … there’ll be a little bit of work to do there,” Rebelez said.
Casey’s operates the fifth-largest pizza chain in the country. Besides pizza, the retailer’s prepared food offerings include chicken wings, sub sandwiches, burgers and salads.
CEFCO’s proprietary foodservice program, CEFCO Kitchen, has only been operating for a few years. It features fresh prepared items across all dayparts, from breakfast tacos and biscuit sandwiches in the morning to CEFCO’s signature chicken “Cluckers” and brisket sandwiches in the afternoon and evening. Some stores also feature a made-to-order burrito bar.
Rebelez added that the permitting process for remodeling and rebranding CEFCO’s stores may take anywhere from 12 to 24 months depending on the jurisdiction. However, he said changes in the forecourt will happen much sooner as Casey’s takes over CEFCO’s fuel pricing and procurement activities.
“I'd anticipate a little more benefit sooner in the [forecourt] timeline than on the remodel side, but really, you should be thinking three to four years from where we sit here today to the end of that integration process,” Rebelez said.
