Speaker 1: This is Bloomberg Business Week with Carol Masser and Jason
Speaker 1: Kelly on Bloomberg Radio. So earlier this year we cut
Speaker 1: up at the CEO of Iowa base to Casey's General Stores,
Speaker 1: the operator of convenience stores in the Midwest, reported earnings
Speaker 1: after the closed yesterday. Top analysts revenue estimates missed on profit.
Speaker 1: We did see the stock under some pressure after hours
Speaker 1: and uh in today's trade back with us though, and
Speaker 1: delighted to check in with him. Is Darren Rebell as
Speaker 1: he is? As we said, CEO of Casey's General Stores
Speaker 1: on the phone from Ankeny, Iowa. Hey, Darren, nice to
Speaker 1: have you back with us. I think we talked to
Speaker 1: you earlier this year. I know you guys were making
Speaker 1: some changes, developing a new strategy that was back in January.
Speaker 1: How are things going, especially against the backdrop of the
Speaker 1: last three months. How how much did you guys have
Speaker 1: to shut down? Well, Hi, Carol, thanks for having me again,
Speaker 1: and it's good to catch up with you all. Um.
Speaker 1: You know, the first thing I'd say is, uh, I
Speaker 1: just want to give a shout out to all of
Speaker 1: our thirty eight thousand team members across our stores and distribution.
Speaker 1: Centers in here in the Midwest. Just getting through this
Speaker 1: entire pandemic has been has been a challenge, to say
Speaker 1: the least. But I couldn't be more proud of our
Speaker 1: team and how they really stepped up and responded to
Speaker 1: the changes in our operation and the changes in guests
Speaker 1: behavior and the various regulatory requirements we had to deal with.
Speaker 1: And uh, they really did a fantastic job and take
Speaker 1: care of their guests and their communities. But in terms
Speaker 1: of how the business performed, how we had to shutdown,
Speaker 1: we were in various stages of sheltering in place, but
Speaker 1: we never had to close any of our stores, excuse me.
Speaker 1: So we were able to to keep our chain open
Speaker 1: and we were an essential service, so um, we were
Speaker 1: staying open the entire time for our communities. So what
Speaker 1: changes did you have to make operationally and how did
Speaker 1: that affect staff and how did that affect staffing, because
Speaker 1: obviously you're very concerned as you mentioned about, you know,
Speaker 1: the health and safety of your employees, health and safety
Speaker 1: of customers. What did you have to do? Yeah, Jason,
Speaker 1: that was really our our top priority was making sure
Speaker 1: that we kept our team members and our guests safe.
Speaker 1: Throughout this entire period. So when things first started to happen,
Speaker 1: we immediately implemented the social distancing measures within our stores
Speaker 1: and marching off um safe distances for our guests to
Speaker 1: stand so we didn't get too close to each other,
Speaker 1: provided PP to all of our team members in the stores.
Speaker 1: We installed plexiglass shields inside of the stores. Um. Probably
Speaker 1: one of the biggest operational changes we had to make
Speaker 1: was we pulled our self service food service and made
Speaker 1: it full serve and uh, so that was a big
Speaker 1: operational challenge. Of course, we had enhanced cleaning, We changed
Speaker 1: hours of operations in our stores to provide more at
Speaker 1: risk guests a special time where they could come in
Speaker 1: and shop and uh and so there's there's a lot
Speaker 1: of different changes all at once and the team handled
Speaker 1: it fantastic. And so how does that affect, you know,
Speaker 1: either on a store level or on a broader level
Speaker 1: the cost structure, because you know, this isn't a super
Speaker 1: high margin business, So I do wonder how that how
Speaker 1: that plays through. Yeah, there were there were really some
Speaker 1: pots and takes to that, and uh, you know, as
Speaker 1: as guests demand started to drop with the shelter and
Speaker 1: place orders we started to make some adjustments to our
Speaker 1: store operating hours. In some cases we just didn't need
Speaker 1: to keep stores open as long as we normally would
Speaker 1: or twenty four hours, so there was a reduction of
Speaker 1: labor hours on that front. But then that got offset
Speaker 1: by some of those investments in the safety measures that
Speaker 1: we implemented. But we also gave some special pay for
Speaker 1: our team members working in the stores and distribution centers
Speaker 1: to acknowledge all their efforts throughout the crisis, and then
Speaker 1: some um additional bonuses for supervisory level folks that are
Speaker 1: out in the field making it happen every day. So
Speaker 1: I do wonder how you see you know, this experience,
Speaker 1: um Darren, and how it kind of shapes longer term
Speaker 1: the strategy for the company. I mean, what's the impact.
Speaker 1: Do you anticipate that a lot of these changes that
Speaker 1: you made will stay in place or is it just
Speaker 1: until we get a vaccine? How do you see it? Well,
Speaker 1: you know, in the in the short term, I think
Speaker 1: you know a number of these measures are going to
Speaker 1: stay in place. I don't I don't see any reason
Speaker 1: to not wear masks or not have the enhanced cleaning
Speaker 1: will leave a plexiglass in place and those sorts of things, UM,
Speaker 1: But from a strategic standpoint, you know, the thing that
Speaker 1: is really encouraging to me. Once once things sort of
Speaker 1: settled down a little bit, we created a plan ahead
Speaker 1: team here that was really tasked with digging into our strategy,
Speaker 1: forecasting what we saw um as what we thought might
Speaker 1: be the new normal, and really pressure tests our strategy.
Speaker 1: And I'm really happy to say that for the most part,
Speaker 1: the things that we set out to do, that we
Speaker 1: discussed the last time we were on the phone and
Speaker 1: um through our investor day, are still things that we
Speaker 1: need to do. And so we're going to stay on
Speaker 1: track with executing against our strategic plan at the same
Speaker 1: time dealing with the the effects of the pandemic. Let's
Speaker 1: continue our conversation with Darren rebellas he is the CEO
Speaker 1: of Casey's General storist, journing us on the phone from
Speaker 1: Iowa and and Darren, I do want to get a
Speaker 1: sense of what the recovery, what the reopening looks like.
Speaker 1: I mean, you probably heard some of the headlines we've
Speaker 1: been talking about here on the East Coast, and you know,
Speaker 1: we're sort of parochial creatures here in our little bubble.
Speaker 1: And Carroll's in New Jersey and I'm here in the
Speaker 1: New York suburbs, and we're on a phase two, you know,
Speaker 1: and feeling like, oh, we can actually have a meal outside.
Speaker 1: And and Carroll's state has just been released from shelter
Speaker 1: in place. The story has looked different, I think, or
Speaker 1: at least slightly different, maybe markedly different in different parts
Speaker 1: of the country. And I wonder what you're seeing across
Speaker 1: your network of stores. Yeah, sure, Jason, We're well, we're
Speaker 1: seeing a variety of things depending on the states, Like
Speaker 1: like you just mentioned, and and so Illinois is our
Speaker 1: second largest state, and they just lifted the stay at
Speaker 1: stay at home restrictions on June one, so they're they're
Speaker 1: just starting to emerge. But here in Iowa, we've started
Speaker 1: to open up over the last several weeks and um
Speaker 1: and it's been a slow process. I thought the Governor
Speaker 1: Kim Reynolds here did a really nice job of first
Speaker 1: opening up to the counties within the state that had
Speaker 1: very low instances of coronavirus rists and then gradually opening
Speaker 1: up the rest of the state. But you we can
Speaker 1: see things starting to get back to normal. It's but
Speaker 1: it's a slow process. Traffic is starting to improve a
Speaker 1: little bit. People are going out to restaurants now primarily
Speaker 1: seating outdoors, not not so much indoors yet, and I
Speaker 1: think the restaurants have done a nice job of spacing
Speaker 1: tables and limiting capacity to try to address that. I
Speaker 1: think we just opened up swimming pools in in fitness
Speaker 1: centers and that sort of thing in the last week
Speaker 1: or so, and so that process is beginning um and
Speaker 1: then church services are starting to begin as well, but
Speaker 1: at reduced capacity. So I think generally speaking, everyone's taking
Speaker 1: a very balance and measured approach and trying to ease
Speaker 1: back into things. But it's it's been encouraging to see
Speaker 1: after being locked up for as long as we were,
Speaker 1: but not so easy. If you think about two Darren,
Speaker 1: the last couple of weeks there were writing you know,
Speaker 1: Iowa is not immune from the riots that we've seen
Speaker 1: in response to what happened to George Floyd in Minneapolis.
Speaker 1: And I do wonder, man, there's there's so much being
Speaker 1: talked about in terms of leadership at this time. You know,
Speaker 1: through the virus, through the rioting, and you know the
Speaker 1: injustices and inequalities that we continue to you know, reveal
Speaker 1: once again that are in our society. As a leader,
Speaker 1: you know, all of this has got to shape you,
Speaker 1: and I just wonder how it has well, Carol. Clearly,
Speaker 1: what happened was George Floyd was was a travesty and
Speaker 1: completely unacceptable and for Casies. Our our purposes to make
Speaker 1: life better for our communities and guests every day, and
Speaker 1: we really take that seriously. And with stores, as you
Speaker 1: can imagine, we serve all types of different communities and
Speaker 1: we really try to engage in and be a part
Speaker 1: of the fabric of those communities that we serve, and
Speaker 1: so we stay very connected there, you know, from a
Speaker 1: leadership standpoint. UM, I have to say this is this
Speaker 1: has been an interesting year. Certainly, situate situations like that
Speaker 1: complicate things, and then the coronavirus and pandemic have complicated
Speaker 1: as well. UM. But you know what I've learned, and
Speaker 1: I was in the military before and I've learned to
Speaker 1: um lead through crises and endangerous situations before. And what
Speaker 1: I can tell you is I think, um, there's some
Speaker 1: principles that are fairly consistent in all these you know,
Speaker 1: one is just being very present and in touch with
Speaker 1: your people and communicating frequently. And that's something that I
Speaker 1: think we've done a really good job here of is
Speaker 1: over communicating, if anything else, and staying very close to
Speaker 1: to our team members and our guests and uh being
Speaker 1: the calm and the storm. And you know, panic has
Speaker 1: never served anybody in a Christians situation. And I think
Speaker 1: we make a a concerted effort to stay calm, stick
Speaker 1: to the facts, and that allows everybody else to stay
Speaker 1: calm and we can deal with the situation. And you know,
Speaker 1: I'd have to say I couldn't be more proud of
Speaker 1: our leadership team here that they really stepped up and
Speaker 1: uh and lead from the front in this situation. And
Speaker 1: I think it's paid off. We've we had some great results,
Speaker 1: We've kept people safe and uh we've been able to
Speaker 1: serve our communities at the same time. Yeah, really interesting,
Speaker 1: And I do think about just to sort of round
Speaker 1: out the conversation, Darren, you know, given your experience at
Speaker 1: seven eleven, and I mentioned I hop sort of jokingly
Speaker 1: on the way out, although not really jokingly. I do
Speaker 1: a lot of pancakes um as says Carol, But you know,
Speaker 1: I do wonder you know the future of of retail
Speaker 1: and convenience and all of these things. What is the
Speaker 1: sort of permanent effect on this, uh as you see it,
Speaker 1: because we know that there will be a sort of
Speaker 1: a this is a solvable health problem, and yet we
Speaker 1: do know that sort of behavior has changed between employees
Speaker 1: and employers, but also between you know, companies and customers,
Speaker 1: and knowing the customer service business as well as you do,
Speaker 1: what do you think changes? Yeah? I think, uh, there's
Speaker 1: always going to be a role for convenience, and you know,
Speaker 1: one when we are able to open everything back up
Speaker 1: and whether it's through a vaccine or or something else
Speaker 1: where everybody feels comfortable again, people are going to get
Speaker 1: back to their busy lives. I don't think that is
Speaker 1: ever going to change. And with that busy, hectic lifestyle
Speaker 1: will always come the need for convenience in immediate consumption
Speaker 1: of food and beverages, and so uh, for us, we're
Speaker 1: going to continue to lean in on the prepared food
Speaker 1: side of our business and continue to innovate there and
Speaker 1: evolve and make that experience as high quality and as
Speaker 1: convenient as we can. And I think some of the
Speaker 1: changes that will probably stay as a result of this
Speaker 1: pandemic is really there really weren't changes as a result
Speaker 1: of the pandemic. They were. Trends are already happening. It's
Speaker 1: just been accelerated. So the digitizing of retail for sure,
Speaker 1: more home delivery, more curbside pick up, those sorts of things.
Speaker 1: Are are going to say it was already happening. Yeah,
Speaker 1: all right, Well we look forward to next time. You're
Speaker 1: a year into the job, a lot, a lot more
Speaker 1: to do, and what a year. Darion Rebella is the
Speaker 1: CEO of Casey's General Store, joining us from Iowa.