Proprietary Data Insights
Top Grocery Store Stock Searches This Month
How to Play the Latest Snacking Trends
While we’ve seen more than a few nice, clean, and tidy 7-Eleven stores in our time (particularly in the suburbs), some urban locations of the convenience store chain are, well, seedy – if not scary. At least this is the case around The Juice’s LA outpost.
Still, as The Juice told you late last year, 7-Eleven is America’s favorite grocery store.
7-Eleven is a grocery store!?
As we noted in December, “If somebody asks your favorite grocery store and enough people say 7-Eleven, it becomes – at least socioculturally – a grocery store.”
Indeed, 62% of all adults rate 7-Eleven as their favorite grocer, with that number higher among younger generations.
So we’re not surprised when we see another convenience store chain – Casey’s General Stores (CASY) – among big names such as Kroger (KR) and Sprouts (SFM) in Trackstar, our proprietary database that tracks the tickers investors search.
After watching a webinar from researcher Circana the other day, we know why investors are interested in convenience stores: Snacking is up during all parts of the day – especially, again, among younger generations. Revenue in the category rose 11.9% for convenience stores between 2021 and 2022.
We’re all snacking more frequently.
But people between 18 and 44 years old snack the most. More than half those Circana surveyed snack three-plus times per day. This age group also favors convenience stores. So the opportunity for companies such as Casey’s could be huge. Which is one reason we’re seeing convenience stores create more welcoming environments and expand their offerings beyond cigarettes, hot dogs, and lottery tickets.
Circana also reports that the health-conscious category is among the fastest-growing across the snack space. 28% and 23% of consumers seek vegetarian and vegan snacks, respectively, up 9 and 6 percentage points compared to the two-year average.
For example, on its most recent earnings call, Casey’s noted that its mobile app accounts for 65% of all digital revenue. The company has added more grocery items to its app and continues to expand its delivery service with and independent of DASH. Casey’s app also hosts a rewards program.
These and other moves indicate the chain is responding to and capitalizing on two key trends: inflation and young America’s love of convenience stores.
The Bottom Line: CASY trades at a price-to-earnings ratio of about 19 and is up roughly 9% over the last year. The company pays a $1.52 annual dividend. And it’s increased its dividend payment for 23 consecutive years, putting it on the verge of dividend aristocrat status.
For long-term investors who want to play this convenience store trend, Casey’s is worth a look.
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