Casey's CEO on 'Being Calm in a Storm'

he is? As we said, CEO of Casey's General Stores on the phone from Ankeny, Iowa. Hey, Darren, nice to have you back with us. I think we talked to you earlier this year. I know you guys were making some changes, developing a new strategy that was back in January. How are things going, especially against the backdrop of the last three months. How how much did you guys have to shut down? Well, Hi, Carol, thanks for having me again,

and it's good to catch up with you all. Um. You know, the first thing I'd say is, uh, I just want to give a shout out to all of our thirty eight thousand team members across our stores and distribution. Centers in here in the Midwest. Just getting through this entire pandemic has been has been a challenge, to say

the least. But I couldn't be more proud of our team and how they really stepped up and responded to the changes in our operation and the changes in guests behavior and the various regulatory requirements we had to deal with. And uh, they really did a fantastic job and take care of their guests and their communities. But in terms of how the business performed, how we had to shutdown, we were in various stages of sheltering in place, but we never had to close any of our stores, excuse me.

So we were able to to keep our chain open and we were an essential service, so um, we were staying open the entire time for our communities. So what changes did you have to make operationally and how did that affect staff and how did that affect staffing, because obviously you're very concerned as you mentioned about, you know, the health and safety of your employees, health and safety

of customers. What did you have to do? Yeah, Jason, that was really our our top priority was making sure that we kept our team members and our guests safe. Throughout this entire period. So when things first started to happen, we immediately implemented the social distancing measures within our stores and marching off um safe distances for our guests to stand so we didn't get too close to each other, provided PP to all of our team members in the stores.

We installed plexiglass shields inside of the stores. Um. Probably one of the biggest operational changes we had to make was we pulled our self service food service and made it full serve and uh, so that was a big operational challenge. Of course, we had enhanced cleaning, We changed hours of operations in our stores to provide more at risk guests a special time where they could come in and shop and uh and so there's there's a lot of different changes all at once and the team handled

it fantastic. And so how does that affect, you know, either on a store level or on a broader level the cost structure, because you know, this isn't a super high margin business, So I do wonder how that how that plays through. Yeah, there were there were really some pots and takes to that, and uh, you know, as as guests demand started to drop with the shelter and place orders we started to make some adjustments to our

store operating hours. In some cases we just didn't need to keep stores open as long as we normally would or twenty four hours, so there was a reduction of labor hours on that front. But then that got offset by some of those investments in the safety measures that

we implemented. But we also gave some special pay for our team members working in the stores and distribution centers to acknowledge all their efforts throughout the crisis, and then some um additional bonuses for supervisory level folks that are out in the field making it happen every day. So I do wonder how you see you know, this experience, um Darren, and how it kind of shapes longer term the strategy for the company. I mean, what's the impact.

Do you anticipate that a lot of these changes that you made will stay in place or is it just until we get a vaccine? How do you see it? Well, you know, in the in the short term, I think you know a number of these measures are going to stay in place. I don't I don't see any reason to not wear masks or not have the enhanced cleaning will leave a plexiglass in place and those sorts of things, UM, But from a strategic standpoint, you know, the thing that

is really encouraging to me. Once once things sort of settled down a little bit, we created a plan ahead team here that was really tasked with digging into our strategy, forecasting what we saw um as what we thought might be the new normal, and really pressure tests our strategy. And I'm really happy to say that for the most part, the things that we set out to do, that we discussed the last time we were on the phone and um through our investor day, are still things that we

need to do. And so we're going to stay on track with executing against our strategic plan at the same time dealing with the the effects of the pandemic. Let's continue our conversation with Darren rebellas he is the CEO of Casey's General storist, journing us on the phone from Iowa and and Darren, I do want to get a sense of what the recovery, what the reopening looks like.

I mean, you probably heard some of the headlines we've been talking about here on the East Coast, and you know, we're sort of parochial creatures here in our little bubble. And Carroll's in New Jersey and I'm here in the New York suburbs, and we're on a phase two, you know, and feeling like, oh, we can actually have a meal outside. And and Carroll's state has just been released from shelter

in place. The story has looked different, I think, or at least slightly different, maybe markedly different in different parts of the country. And I wonder what you're seeing across your network of stores. Yeah, sure, Jason, We're well, we're seeing a variety of things depending on the states, Like like you just mentioned, and and so Illinois is our second largest state, and they just lifted the stay at stay at home restrictions on June one, so they're they're

just starting to emerge. But here in Iowa, we've started to open up over the last several weeks and um and it's been a slow process. I thought the Governor Kim Reynolds here did a really nice job of first opening up to the counties within the state that had very low instances of coronavirus rists and then gradually opening up the rest of the state. But you we can see things starting to get back to normal. It's but it's a slow process. Traffic is starting to improve a

little bit. People are going out to restaurants now primarily seating outdoors, not not so much indoors yet, and I think the restaurants have done a nice job of spacing tables and limiting capacity to try to address that. I think we just opened up swimming pools in in fitness centers and that sort of thing in the last week or so, and so that process is beginning um and then church services are starting to begin as well, but

at reduced capacity. So I think generally speaking, everyone's taking a very balance and measured approach and trying to ease back into things. But it's it's been encouraging to see after being locked up for as long as we were, but not so easy. If you think about two Darren, the last couple of weeks there were writing you know, Iowa is not immune from the riots that we've seen in response to what happened to George Floyd in Minneapolis. And I do wonder, man, there's there's so much being

talked about in terms of leadership at this time. You know, through the virus, through the rioting, and you know the injustices and inequalities that we continue to you know, reveal once again that are in our society. As a leader, you know, all of this has got to shape you, and I just wonder how it has well, Carol. Clearly, what happened was George Floyd was was a travesty and

completely unacceptable and for Casies. Our our purposes to make life better for our communities and guests every day, and we really take that seriously. And with stores, as you can imagine, we serve all types of different communities and we really try to engage in and be a part of the fabric of those communities that we serve, and so we stay very connected there, you know, from a leadership standpoint. UM, I have to say this is this

has been an interesting year. Certainly, situate situations like that complicate things, and then the coronavirus and pandemic have complicated as well. UM. But you know what I've learned, and I was in the military before and I've learned to um lead through crises and endangerous situations before. And what I can tell you is I think, um, there's some principles that are fairly consistent in all these you know, one is just being very present and in touch with

your people and communicating frequently. And that's something that I think we've done a really good job here of is over communicating, if anything else, and staying very close to to our team members and our guests and uh being the calm and the storm. And you know, panic has never served anybody in a Christians situation. And I think we make a a concerted effort to stay calm, stick to the facts, and that allows everybody else to stay

calm and we can deal with the situation. And you know, I'd have to say I couldn't be more proud of our leadership team here that they really stepped up and uh and lead from the front in this situation. And I think it's paid off. We've we had some great results, We've kept people safe and uh we've been able to

serve our communities at the same time. Yeah, really interesting, And I do think about just to sort of round out the conversation, Darren, you know, given your experience at seven eleven, and I mentioned I hop sort of jokingly on the way out, although not really jokingly. I do a lot of pancakes um as says Carol, But you know, I do wonder you know the future of of retail

and convenience and all of these things. What is the sort of permanent effect on this, uh as you see it, because we know that there will be a sort of a this is a solvable health problem, and yet we do know that sort of behavior has changed between employees and employers, but also between you know, companies and customers, and knowing the customer service business as well as you do,

what do you think changes? Yeah? I think, uh, there's always going to be a role for convenience, and you know, one when we are able to open everything back up and whether it's through a vaccine or or something else where everybody feels comfortable again, people are going to get back to their busy lives. I don't think that is

ever going to change. And with that busy, hectic lifestyle will always come the need for convenience in immediate consumption of food and beverages, and so uh, for us, we're going to continue to lean in on the prepared food side of our business and continue to innovate there and evolve and make that experience as high quality and as convenient as we can. And I think some of the changes that will probably stay as a result of this pandemic is really there really weren't changes as a result

of the pandemic. They were. Trends are already happening. It's just been accelerated. So the digitizing of retail for sure, more home delivery, more curbside pick up, those sorts of things. Are are going to say it was already happening. Yeah, all right, Well we look forward to next time. You're a year into the job, a lot, a lot more to do, and what a year. Darion Rebella is the CEO of Casey's General Store, joining us from Iowa.