Dive Brief:
- Casey’s General Stores saw a 3.7% increase in inside same-store sales for the third quarter of fiscal 2025, and “prepared food and dispensed beverage led the way,” President and CEO Darren Rebelez said during the company’s third quarter earnings call on Wednesday.
- Casey’s is seeing positive early results from new programs like its Darn Good Coffee and the addition of chicken wings in test markets. Meanwhile, sales in Casey’s hot sandwich program, which debuted a year ago, notably surged last quarter, growing over 50%, while bakery items grew by almost 10%.
- As competitors like Arko and 7-Eleven test out new food-focused store designs, Casey’s has chosen to innovate within its kitchen. New food items contributed to strong inside margins of over 34% during the quarter.
Dive Insight:
Rebelez said that rolling out new innovations in fresh food to the stores has had a bigger impact on growth than promotional activities. He pointed to the growth in hot sandwich sales, but also highlighted consumer interest in specialty pizza flavors.
“Whenever we get that innovation right, that's when we really see the outsized growth,” he said.
Casey’s has also seen “real strength in the dessert subcategory, primarily cookies,” Rebelez said. Unique flavors have helped the company capitalize with customers who are shying away from increasingly expensive packaged sweets.
“We are seeing people switch over from the candy category into the bakery category, which is a little more affordable and still allows people to get that sweet indulgence that they're looking for,” Rebelez said.
Casey’s Darn Good Coffee debuted in January with a new supplier and new assortment after months of testing and development. Although it’s early into the launch, Rebelez said the company saw a shift to positive unit growth in coffee “for the first time in years.”
Chicken wings joined the menu at over 200 locations in Des Moines, Iowa, earlier this year. Rebelez said Casey’s is seeing “really high satisfaction scores” but has not made any decisions yet regarding further expansion of the program.
