Neat article on Seeking Alpha about our favorite gas station/convenience store:
Whereas many gas stations are owned by integrated oil companies that either license out the stores’ insides or are too large to have the earnings needle swayed by increased in-store food sales in the face of rapidly declining upstream earnings, Casey’s General Stores (NASDAQ: CASY) is perfectly positioned to thrive in a period of low oil prices. In direct juxtaposition to the retailers, Casey’s requires no adventure outside of the home that the consumer would not otherwise have taken and is positioned at the point in the consumer buying process where their gas savings are most salient in their mind. Moreover, the company directly combats the e-commerce trend because consumers are, quite literally, already at the store when they achieve their gas savings.
For those unfamiliar with the company – which I suspect is a great deal of the audience as the company operates only in 14 Midwestern states – Casey’s operates 1,904 gas stations that serve “a wide variety of grocery items, and prepared foods, such as made-from-scratch pizza and donuts, chicken tenders, and sandwiches.”
While on this surface the concept may not seem particularly novel or attractive, the company’s differentiation comes from the markets it serves: small-town USA. That is, only 17% of the company’s stores fall in towns with populations above 20,000 and 57% of stores are located in towns with fewer than 5,000 citizens. For most large chains (both in the convenience sector and gasoline business) these are markets too small to open up in; yet, Casey’s shines here.
Read the entire article at http://seekingalpha.com/article/3767166-short-term-weather-t…