The average margin in the quarter increased about 90 basis points to 33.4%, primarily due to a onetime gross profit benefit related to the cigarette tax change. Towards the end of the quarter, we have seen a more competitive pricing on cigarette packs in parts of our marketing territory. Cigarettes are an important destination item in a convenience store industry. We believe it is imperative to remain competitive in this product line to maintain market share and long-term sales growth in other products. In light of this, we have recently adjusted pricing to match this change in about 1/3 of our stores.Overall, we are pleased with the gains in the Grocery & Other Merchandise category and anticipate acceleration in revenue throughout the fiscal year as we benefit from the rollout of additional operational initiatives. That being said, we also expect the same-store sales in cigarettes to continue to be adversely impacted by the challenges mentioned previously.
Casey's General Stores Management Discusses Q1 2013 Results - Earnings Call Transcript
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