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    Casey's Unveils New Store Design

    Midwest chain looks to increase gross-profit dollars by building larger stores with more space for the high-margin categories such as prepared foods and packaged beverages.

    By Linda Lisanti

    ANKENY, Iowa -- Casey’s General Stores is rolling out a new store design that’s 1,000 square feet larger than the chain’s existing stores, with the goal to increase gross-profit dollars by driving traffic to higher-margin, faster-moving products such as packaged beverages and prepared foods, Casey’s chief financial officer Bill Walljasper told CSNews Online.

    The first store built under this design opened last week in Greenup, Ill., and more will follow. Casey’s goal for fiscal 2009 is to increase its store count by 4 percent.

    The new design spans 3,700 square feet, whereas Casey’s average store measures 2,700 square feet. Half of that extra square footage is used to move the checkout to the center of the store, and expand the cooler set from an average nine doors to 14 or 15 doors.

    "We’re making room for expansion of energy drinks, vitaminwaters, craft beers, and different package sizes of beer to make sure we meet our customers’ needs not only in product selection, but also in packaging variety," Walljasper explained.

    The remainder of the extra space is dedicated to prepared foods. Casey’s is making several additions to this area, starting with the introduction of stronger flavor profiles in its proprietary coffee program. The update consists of stronger blends, creamers, syrups and an expanding test of iced coffee, which is now offered in roughly 100 stores.

    "Our normal coffee offer has been regular or decaf. In these new stores, though, we’re doing more flavors like Kona and French Vanilla, as well as expanding our cappuccino flavors. In some stores, we even have grinders," Walljasper said in an interview with CSNews Online. "This way, our customers have more variety."

    In select stores, Casey’s will also launch a built-to-order sandwich program. Right now, the chain offer sandwiches that are made fresh in stores and then put in a cold case for grab-and-go. Some stores also will have a seating area where customers can dine.

    "Prepared foods is the highest-margin category in our business, and we’ve been at it for quite some time," Walljasper said. Casey’s existing prepared foods offer includes its flagship made-from-scratch pizza program, made-from-scratch cake doughnuts and a wide variety of other items from chicken tenders and cookies to pork tenderloins.

    The new store model ushers in aesthetic changes as well. Corian counters and slate floors give the newly designed locations a more updated, upscale look and feel.

    Casey’s has been pursuing a new store design for more than a year and a half, and about a year ago, the company began introducing certain aspects of the new design into its remodels. Walljasper said they found the new elements performed "very well."

    The Ankeny, Iowa-based convenience retailer is rolling out its new design in three ways—new store constructions; replacements (raze and rebuild); and major remodels where an addition will be built onto each side of an existing Casey’s store to make room for the expanded cooler set and prepared foods area.

    This fiscal year, Casey’s plans call for 20 more new constructions, 15 to 20 store replacements, and 10 major remodels barring any weather issues, Walljasper said.

    "Some will be in rural locations, some interstate, some more urban areas. We want to see exactly where this concept will work the best, and then we can push that downward and start accelerating more," he said, noting Casey’s currently operates 1,456 stores. "In some communities, it might not make sense, but we think it will for most of our stores."

    And since the new design costs just $300,000 more to build than its old store model, he added that it is "a relatively inexpensive way to drive returns at existing stores."

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