Alimentation Couche-Tard Puts Focus on In-Store Innovation

LAVAL, Quebec — Alimentation Couche-Tard Inc. is moving forward with in-store initiatives, including ramping up its new food program.

According to President and CEO Brian Hannasch, the company is rolling out its food at scale pilot, a program that is heavily based on Holiday Stationstores' food program.

Couche-Tard, the parent company of Circle K, acquired the Holiday Cos. and its Holiday Stationstores convenience store portfolio in late 2018.

"We have strong engagement across the company with multiple cross-functional teams established to gather insights and quickly react to learnings as we optimize this program," Hannasch said during the company's third-quarter fiscal year 2020 earnings call, held March 18.

"We've rolled out the food program to different format stores intentionally to help us understand how we can make this work broadly across the network, and feel great about the performance and learnings we are receiving so far," he explained, adding that he is excited for program's potential for customers and the related sales and traffic impact it has on the stores.

Beverage Enhancements

Also in the area of foodservice, Couche-Tard is growing its hot dispensed beverages segment with the installation of coffee-on-demand machines across the United States. The rollout is more than 90 percent complete.

"We launched a national media campaign in January to drive incremental trial with incredible value starting at $1 during our campaign period," Hannasch said. "We have approximately 13,500 bean-to-cup machines installed, serving fresh coffee 24 hours a day."

In frozen dispensed beverages, the retailer's Froster program has been brought to 140-plus sites in Europe, largely in Ireland where the company saw tremendous success this past summer. Couche-Tard plans to bring the program to most of its business units in Europe by the end of this fiscal year.

In cold dispensed beverages, it expanded its Polar Pop offering in Canada to an additional 110 stores during the latest quarter.

Inside the cold vault, Hannasch noted that hard seltzers and low-calorie beer have been bright spots, as traditional premium brands are showing some softness. Energy drinks are also showing strength.

Technology Enhancements

In the area of technology, Couche-Tard is pushing its Lift initiative to more stores. By the end of the third quarter, the digital upsell program reached more than 7,700 of its stores in North America.

"We continue to see strong engagement from our customers and associates, driving increased loyalty and market basket growth from the platform," Hannasch said.

Couche-Tard saw a Q3 increase in U.S. same-store merchandise revenue of 3 percent, compared to the same quarter in its 2019 fiscal year. In Canada, same-store merchandise revenues increased 4.2 percent. In Europe, same-store revenues increased 2.1 percent.

"Across the network, we continue to see positive benefits driven by the successful rebranding activities, continued improvements to our offerings, as well as various initiatives to drive traffic into our stores," the chief executive said.

Alimentation Couche-Tard is based in Laval. As of Feb. 2, its network comprised 9,799 c-stores throughout North America. Its North American network consists of 18 business units, including 14 in the United States covering 48 states and four in Canada covering all 10 provinces.

In Europe, Couche-Tard operates a broad retail network across Scandinavia, Ireland, Poland, the Baltics and Russia through 10 business units. As of Feb. 2, its European network comprised 2,697 stores.

In addition, under licensing agreements, more than 2,380 stores are operated under the Circle K banner in 15 other countries and territories, bringing the worldwide total network to more than 14,800 stores.