Dive Brief:
- Casey’s General Stores intends to begin rebranding CEFCO’s 198 locations “in earnest” at the beginning of next calendar year, Darren Rebelez, Casey’s chairman, president and CEO, said during the retailer’s second-quarter earnings call on Wednesday.
- The conversion efforts will begin with CEFCO’s larger stores that have kitchens, which will be easier to convert to the Casey’s brand because they won’t need a kitchen installation, Rebelez said on the call. Once those are complete, work on other stores will begin, he added.
- Casey’s acquired CEFCO and its parent company, Fikes Wholesale, for $1.1 billion in late 2024, but has yet to roll out a full-scale rebrand after spending the past year evaluating how CEFCO’s brand and offerings intertwine with its own.
Dive Insight:
Rebelez has clearly outlined Casey’s plans for CEFCO. Just days after announcing the deal last summer, he said Casey’s would spend roughly $150 million to rebrand nearly all CEFCO locations to its own banner and remodel locations to fit Casey’s mold, notably by adding new kitchens. He said this process would take three to four years to complete.
Casey’s spent the past year assessing how the Texas-based retailer’s foodservice program specifically would resonate with Casey’s guests. Casey’s opened a few test sites that featured both brands’ programs in an effort to understand how these offerings perform together. This summer, Rebelez said this evaluation process was nearing its end.
During Wednesday’s call, Rebelez said that CEFCO’s stores have lower margins in prepared foods, grocery and general merchandise than Casey’s stores. Rebranding these sites to Casey’s — and adding its full suite of offerings — should change that trajectory, Rebelez added.
“We expect that margin to accrete over time, but as it stands right now, [CEFCO’s] margin rate in prepared foods is about half of what the mothership Casey's prepared foods margin is, so it is going to have an impact,” Rebelez said.
Casey’s acquisition of CEFCO was the largest purchase in company history, bringing on 148 new c-stores in Texas and 50 others across Alabama, Florida and Mississippi. The deal cemented Iowa-based Casey’s as a major competitive c-store threat in the South.
