WEBVTT - Casey's CEO on 'Being Calm in a Storm' 0:00:01.000 --> 0:00:04.640 This is Bloomberg Business Week with Carol Masser and Jason 0:00:04.760 --> 0:00:08.200 Kelly on Bloomberg Radio. So earlier this year we cut 0:00:08.240 --> 0:00:10.959 up at the CEO of Iowa base to Casey's General Stores, 0:00:11.000 --> 0:00:14.000 the operator of convenience stores in the Midwest, reported earnings 0:00:14.040 --> 0:00:17.920 after the closed yesterday. Top analysts revenue estimates missed on profit. 0:00:18.239 --> 0:00:21.160 We did see the stock under some pressure after hours 0:00:21.400 --> 0:00:23.880 and uh in today's trade back with us though, and 0:00:23.960 --> 0:00:27.320 delighted to check in with him. Is Darren Rebell as 0:00:27.440 --> 0:00:30.320 he is? As we said, CEO of Casey's General Stores 0:00:30.360 --> 0:00:33.600 on the phone from Ankeny, Iowa. Hey, Darren, nice to 0:00:33.640 --> 0:00:35.440 have you back with us. I think we talked to 0:00:35.479 --> 0:00:38.720 you earlier this year. I know you guys were making 0:00:39.320 --> 0:00:43.000 some changes, developing a new strategy that was back in January. 0:00:43.440 --> 0:00:46.400 How are things going, especially against the backdrop of the 0:00:46.479 --> 0:00:49.680 last three months. How how much did you guys have 0:00:49.760 --> 0:00:53.640 to shut down? Well, Hi, Carol, thanks for having me again, 0:00:53.720 --> 0:00:56.279 and it's good to catch up with you all. Um. 0:00:56.560 --> 0:01:00.040 You know, the first thing I'd say is, uh, I 0:01:00.080 --> 0:01:02.640 just want to give a shout out to all of 0:01:02.640 --> 0:01:07.160 our thirty eight thousand team members across our stores and distribution. 0:01:07.240 --> 0:01:11.800 Centers in here in the Midwest. Just getting through this 0:01:12.040 --> 0:01:15.480 entire pandemic has been has been a challenge, to say 0:01:15.480 --> 0:01:18.200 the least. But I couldn't be more proud of our 0:01:18.240 --> 0:01:21.680 team and how they really stepped up and responded to 0:01:22.440 --> 0:01:25.840 the changes in our operation and the changes in guests 0:01:25.840 --> 0:01:30.800 behavior and the various regulatory requirements we had to deal with. 0:01:30.959 --> 0:01:33.600 And uh, they really did a fantastic job and take 0:01:33.680 --> 0:01:37.120 care of their guests and their communities. But in terms 0:01:37.160 --> 0:01:41.560 of how the business performed, how we had to shutdown, 0:01:41.640 --> 0:01:45.800 we were in various stages of sheltering in place, but 0:01:45.840 --> 0:01:50.280 we never had to close any of our stores, excuse me. 0:01:50.320 --> 0:01:52.640 So we were able to to keep our chain open 0:01:52.640 --> 0:01:56.200 and we were an essential service, so um, we were 0:01:56.800 --> 0:02:00.080 staying open the entire time for our communities. So what 0:02:00.200 --> 0:02:03.600 changes did you have to make operationally and how did 0:02:03.600 --> 0:02:06.760 that affect staff and how did that affect staffing, because 0:02:06.760 --> 0:02:10.400 obviously you're very concerned as you mentioned about, you know, 0:02:10.440 --> 0:02:13.040 the health and safety of your employees, health and safety 0:02:13.040 --> 0:02:17.639 of customers. What did you have to do? Yeah, Jason, 0:02:17.680 --> 0:02:20.600 that was really our our top priority was making sure 0:02:20.680 --> 0:02:23.239 that we kept our team members and our guests safe. 0:02:23.400 --> 0:02:28.160 Throughout this entire period. So when things first started to happen, 0:02:28.320 --> 0:02:32.560 we immediately implemented the social distancing measures within our stores 0:02:32.680 --> 0:02:37.160 and marching off um safe distances for our guests to 0:02:37.320 --> 0:02:39.519 stand so we didn't get too close to each other, 0:02:40.360 --> 0:02:43.960 provided PP to all of our team members in the stores. 0:02:44.040 --> 0:02:49.160 We installed plexiglass shields inside of the stores. Um. Probably 0:02:49.160 --> 0:02:51.799 one of the biggest operational changes we had to make 0:02:52.040 --> 0:02:56.520 was we pulled our self service food service and made 0:02:56.520 --> 0:02:59.320 it full serve and uh, so that was a big 0:02:59.360 --> 0:03:03.320 operational challenge. Of course, we had enhanced cleaning, We changed 0:03:03.360 --> 0:03:07.959 hours of operations in our stores to provide more at 0:03:08.040 --> 0:03:10.640 risk guests a special time where they could come in 0:03:11.280 --> 0:03:14.440 and shop and uh and so there's there's a lot 0:03:14.480 --> 0:03:17.120 of different changes all at once and the team handled 0:03:17.120 --> 0:03:20.280 it fantastic. And so how does that affect, you know, 0:03:20.480 --> 0:03:23.400 either on a store level or on a broader level 0:03:23.880 --> 0:03:26.720 the cost structure, because you know, this isn't a super 0:03:26.800 --> 0:03:30.040 high margin business, So I do wonder how that how 0:03:30.080 --> 0:03:33.840 that plays through. Yeah, there were there were really some 0:03:33.919 --> 0:03:37.120 pots and takes to that, and uh, you know, as 0:03:37.440 --> 0:03:40.600 as guests demand started to drop with the shelter and 0:03:40.640 --> 0:03:43.800 place orders we started to make some adjustments to our 0:03:43.840 --> 0:03:46.480 store operating hours. In some cases we just didn't need 0:03:46.520 --> 0:03:49.800 to keep stores open as long as we normally would 0:03:49.920 --> 0:03:52.720 or twenty four hours, so there was a reduction of 0:03:52.840 --> 0:03:56.880 labor hours on that front. But then that got offset 0:03:56.960 --> 0:04:00.720 by some of those investments in the safety measures that 0:04:00.760 --> 0:04:05.040 we implemented. But we also gave some special pay for 0:04:05.080 --> 0:04:08.440 our team members working in the stores and distribution centers 0:04:08.480 --> 0:04:11.880 to acknowledge all their efforts throughout the crisis, and then 0:04:11.960 --> 0:04:17.120 some um additional bonuses for supervisory level folks that are 0:04:17.120 --> 0:04:20.280 out in the field making it happen every day. So 0:04:20.320 --> 0:04:24.880 I do wonder how you see you know, this experience, 0:04:25.160 --> 0:04:27.680 um Darren, and how it kind of shapes longer term 0:04:27.720 --> 0:04:29.840 the strategy for the company. I mean, what's the impact. 0:04:29.839 --> 0:04:32.400 Do you anticipate that a lot of these changes that 0:04:32.440 --> 0:04:34.279 you made will stay in place or is it just 0:04:34.400 --> 0:04:38.479 until we get a vaccine? How do you see it? Well, 0:04:38.520 --> 0:04:40.880 you know, in the in the short term, I think 0:04:41.480 --> 0:04:43.120 you know a number of these measures are going to 0:04:43.160 --> 0:04:45.680 stay in place. I don't I don't see any reason 0:04:45.720 --> 0:04:48.760 to not wear masks or not have the enhanced cleaning 0:04:49.600 --> 0:04:55.320 will leave a plexiglass in place and those sorts of things, UM, 0:04:55.360 --> 0:04:58.400 But from a strategic standpoint, you know, the thing that 0:04:58.480 --> 0:05:02.479 is really encouraging to me. Once once things sort of 0:05:02.760 --> 0:05:06.159 settled down a little bit, we created a plan ahead 0:05:06.200 --> 0:05:10.640 team here that was really tasked with digging into our strategy, 0:05:11.120 --> 0:05:15.000 forecasting what we saw um as what we thought might 0:05:15.040 --> 0:05:18.000 be the new normal, and really pressure tests our strategy. 0:05:18.040 --> 0:05:21.240 And I'm really happy to say that for the most part, 0:05:21.279 --> 0:05:24.680 the things that we set out to do, that we 0:05:25.240 --> 0:05:27.360 discussed the last time we were on the phone and 0:05:27.680 --> 0:05:30.600 um through our investor day, are still things that we 0:05:30.680 --> 0:05:33.599 need to do. And so we're going to stay on 0:05:33.680 --> 0:05:37.000 track with executing against our strategic plan at the same 0:05:37.040 --> 0:05:41.400 time dealing with the the effects of the pandemic. Let's 0:05:41.400 --> 0:05:44.680 continue our conversation with Darren rebellas he is the CEO 0:05:44.720 --> 0:05:47.400 of Casey's General storist, journing us on the phone from 0:05:47.440 --> 0:05:50.440 Iowa and and Darren, I do want to get a 0:05:50.640 --> 0:05:54.839 sense of what the recovery, what the reopening looks like. 0:05:54.920 --> 0:05:56.560 I mean, you probably heard some of the headlines we've 0:05:56.600 --> 0:05:59.520 been talking about here on the East Coast, and you know, 0:05:59.600 --> 0:06:02.360 we're sort of parochial creatures here in our little bubble. 0:06:02.440 --> 0:06:04.280 And Carroll's in New Jersey and I'm here in the 0:06:04.320 --> 0:06:06.760 New York suburbs, and we're on a phase two, you know, 0:06:06.800 --> 0:06:09.600 and feeling like, oh, we can actually have a meal outside. 0:06:09.640 --> 0:06:12.479 And and Carroll's state has just been released from shelter 0:06:12.560 --> 0:06:15.560 in place. The story has looked different, I think, or 0:06:15.720 --> 0:06:18.600 at least slightly different, maybe markedly different in different parts 0:06:18.600 --> 0:06:21.120 of the country. And I wonder what you're seeing across 0:06:21.160 --> 0:06:25.640 your network of stores. Yeah, sure, Jason, We're well, we're 0:06:25.640 --> 0:06:28.760 seeing a variety of things depending on the states, Like 0:06:29.000 --> 0:06:31.800 like you just mentioned, and and so Illinois is our 0:06:31.920 --> 0:06:36.120 second largest state, and they just lifted the stay at 0:06:36.600 --> 0:06:40.040 stay at home restrictions on June one, so they're they're 0:06:40.120 --> 0:06:43.800 just starting to emerge. But here in Iowa, we've started 0:06:43.800 --> 0:06:47.280 to open up over the last several weeks and um 0:06:47.320 --> 0:06:50.800 and it's been a slow process. I thought the Governor 0:06:50.920 --> 0:06:54.159 Kim Reynolds here did a really nice job of first 0:06:54.160 --> 0:06:57.000 opening up to the counties within the state that had 0:06:57.160 --> 0:07:02.560 very low instances of coronavirus rists and then gradually opening 0:07:02.640 --> 0:07:05.680 up the rest of the state. But you we can 0:07:05.760 --> 0:07:08.599 see things starting to get back to normal. It's but 0:07:08.680 --> 0:07:11.480 it's a slow process. Traffic is starting to improve a 0:07:11.480 --> 0:07:15.400 little bit. People are going out to restaurants now primarily 0:07:15.400 --> 0:07:19.480 seating outdoors, not not so much indoors yet, and I 0:07:19.520 --> 0:07:22.400 think the restaurants have done a nice job of spacing 0:07:22.440 --> 0:07:27.480 tables and limiting capacity to try to address that. I 0:07:27.520 --> 0:07:30.800 think we just opened up swimming pools in in fitness 0:07:30.840 --> 0:07:32.840 centers and that sort of thing in the last week 0:07:32.920 --> 0:07:36.600 or so, and so that process is beginning um and 0:07:36.640 --> 0:07:39.000 then church services are starting to begin as well, but 0:07:39.640 --> 0:07:45.160 at reduced capacity. So I think generally speaking, everyone's taking 0:07:45.480 --> 0:07:48.760 a very balance and measured approach and trying to ease 0:07:48.800 --> 0:07:51.760 back into things. But it's it's been encouraging to see 0:07:51.800 --> 0:07:54.080 after being locked up for as long as we were, 0:07:54.400 --> 0:07:56.720 but not so easy. If you think about two Darren, 0:07:56.760 --> 0:07:59.000 the last couple of weeks there were writing you know, 0:07:59.240 --> 0:08:01.760 Iowa is not immune from the riots that we've seen 0:08:02.200 --> 0:08:05.360 in response to what happened to George Floyd in Minneapolis. 0:08:05.360 --> 0:08:08.840 And I do wonder, man, there's there's so much being 0:08:08.840 --> 0:08:12.720 talked about in terms of leadership at this time. You know, 0:08:12.800 --> 0:08:16.880 through the virus, through the rioting, and you know the 0:08:16.920 --> 0:08:21.200 injustices and inequalities that we continue to you know, reveal 0:08:21.280 --> 0:08:23.720 once again that are in our society. As a leader, 0:08:24.080 --> 0:08:26.640 you know, all of this has got to shape you, 0:08:26.720 --> 0:08:31.760 and I just wonder how it has well, Carol. Clearly, 0:08:32.440 --> 0:08:35.800 what happened was George Floyd was was a travesty and 0:08:36.120 --> 0:08:41.840 completely unacceptable and for Casies. Our our purposes to make 0:08:42.120 --> 0:08:44.559 life better for our communities and guests every day, and 0:08:45.000 --> 0:08:48.800 we really take that seriously. And with stores, as you 0:08:48.840 --> 0:08:52.880 can imagine, we serve all types of different communities and 0:08:53.720 --> 0:08:56.800 we really try to engage in and be a part 0:08:56.800 --> 0:08:59.040 of the fabric of those communities that we serve, and 0:08:59.080 --> 0:09:02.040 so we stay very connected there, you know, from a 0:09:02.120 --> 0:09:05.760 leadership standpoint. UM, I have to say this is this 0:09:05.800 --> 0:09:10.520 has been an interesting year. Certainly, situate situations like that 0:09:11.440 --> 0:09:15.720 complicate things, and then the coronavirus and pandemic have complicated 0:09:15.800 --> 0:09:19.680 as well. UM. But you know what I've learned, and 0:09:19.800 --> 0:09:22.120 I was in the military before and I've learned to 0:09:22.720 --> 0:09:26.640 um lead through crises and endangerous situations before. And what 0:09:26.720 --> 0:09:29.800 I can tell you is I think, um, there's some 0:09:29.840 --> 0:09:33.120 principles that are fairly consistent in all these you know, 0:09:33.160 --> 0:09:36.440 one is just being very present and in touch with 0:09:37.000 --> 0:09:40.320 your people and communicating frequently. And that's something that I 0:09:40.360 --> 0:09:43.280 think we've done a really good job here of is 0:09:44.559 --> 0:09:47.440 over communicating, if anything else, and staying very close to 0:09:48.120 --> 0:09:51.839 to our team members and our guests and uh being 0:09:51.880 --> 0:09:54.920 the calm and the storm. And you know, panic has 0:09:54.960 --> 0:09:58.200 never served anybody in a Christians situation. And I think 0:09:58.200 --> 0:10:02.480 we make a a concerted effort to stay calm, stick 0:10:02.520 --> 0:10:06.120 to the facts, and that allows everybody else to stay 0:10:06.120 --> 0:10:09.760 calm and we can deal with the situation. And you know, 0:10:09.800 --> 0:10:12.040 I'd have to say I couldn't be more proud of 0:10:12.040 --> 0:10:15.320 our leadership team here that they really stepped up and 0:10:15.520 --> 0:10:20.240 uh and lead from the front in this situation. And 0:10:20.360 --> 0:10:23.520 I think it's paid off. We've we had some great results, 0:10:23.559 --> 0:10:26.760 We've kept people safe and uh we've been able to 0:10:26.800 --> 0:10:29.960 serve our communities at the same time. Yeah, really interesting, 0:10:30.000 --> 0:10:32.120 And I do think about just to sort of round 0:10:32.120 --> 0:10:35.720 out the conversation, Darren, you know, given your experience at 0:10:35.760 --> 0:10:38.199 seven eleven, and I mentioned I hop sort of jokingly 0:10:38.280 --> 0:10:40.079 on the way out, although not really jokingly. I do 0:10:40.120 --> 0:10:43.120 a lot of pancakes um as says Carol, But you know, 0:10:43.200 --> 0:10:48.640 I do wonder you know the future of of retail 0:10:48.760 --> 0:10:53.280 and convenience and all of these things. What is the 0:10:53.320 --> 0:10:57.720 sort of permanent effect on this, uh as you see it, 0:10:57.800 --> 0:11:00.280 because we know that there will be a sort of 0:11:00.320 --> 0:11:04.320 a this is a solvable health problem, and yet we 0:11:04.400 --> 0:11:07.880 do know that sort of behavior has changed between employees 0:11:08.320 --> 0:11:12.040 and employers, but also between you know, companies and customers, 0:11:12.080 --> 0:11:14.839 and knowing the customer service business as well as you do, 0:11:15.040 --> 0:11:20.080 what do you think changes? Yeah? I think, uh, there's 0:11:20.080 --> 0:11:23.480 always going to be a role for convenience, and you know, 0:11:23.520 --> 0:11:26.800 one when we are able to open everything back up 0:11:27.720 --> 0:11:30.720 and whether it's through a vaccine or or something else 0:11:30.720 --> 0:11:34.040 where everybody feels comfortable again, people are going to get 0:11:34.080 --> 0:11:36.560 back to their busy lives. I don't think that is 0:11:36.640 --> 0:11:41.160 ever going to change. And with that busy, hectic lifestyle 0:11:41.200 --> 0:11:45.119 will always come the need for convenience in immediate consumption 0:11:45.920 --> 0:11:50.719 of food and beverages, and so uh, for us, we're 0:11:50.760 --> 0:11:53.439 going to continue to lean in on the prepared food 0:11:53.480 --> 0:11:56.480 side of our business and continue to innovate there and 0:11:56.600 --> 0:12:00.640 evolve and make that experience as high quality and as 0:12:00.679 --> 0:12:03.079 convenient as we can. And I think some of the 0:12:03.160 --> 0:12:08.040 changes that will probably stay as a result of this 0:12:08.120 --> 0:12:12.439 pandemic is really there really weren't changes as a result 0:12:12.480 --> 0:12:14.920 of the pandemic. They were. Trends are already happening. It's 0:12:15.000 --> 0:12:19.680 just been accelerated. So the digitizing of retail for sure, 0:12:20.320 --> 0:12:24.160 more home delivery, more curbside pick up, those sorts of things. 0:12:24.240 --> 0:12:26.920 Are are going to say it was already happening. Yeah, 0:12:27.000 --> 0:12:29.360 all right, Well we look forward to next time. You're 0:12:29.400 --> 0:12:32.200 a year into the job, a lot, a lot more 0:12:32.280 --> 0:12:34.360 to do, and what a year. Darion Rebella is the 0:12:34.360 --> 0:12:37.440 CEO of Casey's General Store, joining us from Iowa.