Our approach to this business category is straightforward. We attract customers by making sure we have the gasoline they want at a price they can’t beat locally. We make the purchase easy and quick with pay at the pump. Customers can use almost any recognized credit card, including Casey’s own co-branded MasterCard. We canopy our service areas for comfort and light them for safety. We price with the local competition, whether in the next block or the next town, because if we lose customers over our gasoline price, we may never see them again. “We’ll accept some margin volatility so we can draw the customers inside our stores. That’s where we generate over 75% of Casey’s gross profit,” said Handley. In recent years, quarterly margins generally have varied from about 9 cents to roughly 12 cents per gallon for a historical annual average of 10.8 cents. ![]() |
“We are proficient at purchasing and delivering gasoline, but the retail environment has a significant impact on our bottom line,” said Sam Billmeyer, Senior Vice President–Transportation & Support Operations. In fiscal 2006, sales and margins were extraordinarily high, and our results were also extraordinary—we increased gasoline gross profit 15.2% to $125.4 million. Conditions were less favorable in fiscal 2007. Gasoline sales were slow primarily due to high retail prices throughout the Midwest during the spring and summer, usually our busiest months. In the fall and winter, competitors kept retail prices low relative to wholesale costs, and we priced right along with them. Though both sales and margin improved in the fourth quarter, we didn’t gain enough ground to meet the goal for this category— increase ![]() |
![]() same-store gallons sold 2% with a margin of 10.8 cents. Same-store gallons sold were up 1.4%, contributing to a 9.1% increase in total gallons sold, and the average margin was 10.4 cents. As a result, gasoline gross profit was down 1.1% to $124.1 million. We are confident that we’ll increase same-store gallons sold 2% by April 30, 2008. We lowered the margin goal to 10.7 cents per gallon because we know we’ll likely lose some state tax credits on ethanol we sell in Iowa. We were pleased that retail prices were more responsive to rising wholesale costs during the last three months of fiscal 2007 and hope the pattern continues. |