Analyst: Couche-Tard to Join with Brooks and Eckerd

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Analyst: Couche-Tard to Join with Brooks and Eckerd

MONTREAL -- After selling its U.S. stores to Rite Aid, the Brooks and Eckerd drug store chain owner Jean Coutu Group is the focus of rumors that it will need to partner or sell its chain to other channels, including c-store operator Alimentation Couche-Tard, to expand its presence in Canada, the Canadian Press reported.

"I think they should exit the business, somehow, some way," one industry observer who didn't want to be identified, told the Press.

In reality, the Canadian market doesn't hold many opportunities to grow in a meaningful way beyond the Quebec border, he added. "That leaves the business in a conundrum as to what's acceptable growth for the Canadian operations as a public entity and that opens Pandora's Box."

In addition, it is believed that the company will team up with grocery giant Metro Inc., Couche-Tard or eventually with Rite Aid to import the drug store banner to Canada.

Francois Coutu, president of the Canadian operations for the company, told the Press the company's board has not made any decision about such matters, but the family has no desire to sell or take the company private.