Post-COVID inflation was a shock to the system, says Casey's CEO Darren Rebelez

Key Concepts:

• Value proposition
• Inflation and interest rate impact on consumer behavior
• Market saturation
• Expansion strategy (acquisition)
• Store density

Value Proposition and Consumer Behavior

The speaker emphasizes the importance of delivering quality in their product. The discussion shifts to the changing consumer perception of value, particularly in America. The key point is that consumers are now more discerning about the value they receive for their money. This shift is attributed to the economic shocks of the past several years, including:

• Supply chain challenges post-COVID: These challenges led to increased prices and a disruption in the availability of goods.
• Inflation: The rise in inflation further eroded purchasing power and made consumers more sensitive to prices.
• Rising interest rates: Higher interest rates made borrowing more expensive, impacting consumer spending and investment decisions.

The speaker argues that these factors have collectively made consumers question the value they are getting for their money, even those with financial means. The company's strategy to lean into quality is presented as a response to this shift, allowing them to maintain their value proposition and continue attracting customers.

Market Saturation and Expansion Strategy

The conversation then moves to the potential for further expansion, particularly in rural areas. The speaker acknowledges the significant amount of untapped market potential, suggesting the possibility of opening thousands more stores.

Example: Iowa vs. Texas

A specific example is provided to illustrate the potential for growth:

• Iowa: A population of 3 million people with 550 stores.
• Texas: A population of 30 million people with 170 stores (following an acquisition).

This comparison highlights the significant disparity in store density between the two states, suggesting substantial room for expansion in Texas and other similar markets.

Acquisition in Texas

The acquisition in Texas is described as a successful transaction. The speaker notes that the acquisition was reasonably priced and that the acquired entity was integrated effectively from the beginning. The positive aspects of the acquisition are emphasized, including the quality of the people involved.

Conclusion

The main takeaways are that consumer perception of value has shifted due to recent economic events, and companies must focus on delivering quality to maintain their value proposition. The example of Iowa and Texas illustrates the potential for expansion in less saturated markets, and strategic acquisitions can be a successful growth strategy.