KDSN RADIO News
Caseys CEO says cold weather a bigger issue than potential recession
(Radio Iowa) – The Ankeny-based Casey’s Convenience store chain reported that in-store and gas sales were up slightly, as was their net income in the third quarter. Casey’s Darren Rebelez says weather conditions have been more of a recent concern than a potential recession. “Casey’s for a long time, has performed very well during recessionary times, and I think that’s for a couple of reasons. One is that we sell basic daily needs that people need. They’re low dollar denominations,” Rebelez says. He spoke during a conference call on the quarterly results and said their products are not the first to go. “In the grand scheme of things, when people have to pull back on discretionary spending, a lot of what we sell would be considered by our guests to be nondiscretionary,” he says, “and because there tends to be a lower price point, it isn’t the first thing to cut on the list, because these are daily needs.”
Rebelez says when it comes to food, only about half of their stores have a national brand competitor in their trade area that Casey’s has to compete with. “As consumers start to look for value, we’re a great trade-down opportunity from a price perspective, but not a trade-down in quality,” Rebelez says. “So think consumers feel really good about being able to stretch their dollars with us on the food side,” Rebelez says their low-income consumers who make less than 50 thousand dollars a year make up only about 25 percent of their customers. He says they still see positive growth from those customers, it’s just not at the same rate for other income customers, and when they are cutting back, it’s in the alcohol and tobacco areas.
Rebelez says the weather can have a much more immediate impact. “I don’t have specific numbers to share with you on that other than to say February was a tough weather month. And I can tell you when the temperature difference is 50 or 60 degrees colder than the prior year. I mean, you see it in the numbers,” he says. Rebelez says the numbers come back when the weather starts to normalize. He says the weather impacted some of their newly acquired stores in Texas and Florida this quarter, where they had snow that they rarely see.
