BONUS CONTENT: Couche-Tard Eyes Further Global Expansion
LAVAL, Quebec — Alimentation Couche-Tard Inc. may have its roots in Canada, yet over its 36-year history, the convenience store operator has shown a talent for growing not just in its home country — or even its home continent — but internationally as well.
In 2015 alone, the company acquired The Pantry Inc., based in Cary, N.C.; Fast Max Convenience Stores, based in Seymour, Ind.; and Shell's marketing operations in Denmark. So far this year, Couche-Tard, parent of the Circle K brand, completed its acquisition of Dublin-based Topaz Energy Group Ltd. and inked a deal with Imperial Oil to acquire 279 Canadian Esso-branded convenience stores, 229 of which are located in Ontario and 50 in Québec.
And Couche-Tard is not stopping there. President and CEO Brian Hannasch told Convenience Store News the retailer has some great Circle K partners in Asia — an area where he said the convenience store industry is poised for growth over the next 10 to 20 years given the increase in disposable income and the emergence of the middle class there.
"That's certainly an area we will continue to work to understand better and understand if there are opportunities for us," Hannasch told CSNews. "I would say the same in Europe. We have been there for four years now and in those four years, we've had the opportunity to look at a lot of different things, different countries and refine that list of where we want to be over time and where we wouldn't want to be over time."
Mexico is another possible growth spot, Hannasch revealed, and although Couche-Tard has not really looked in South America, the chief executive said: “Never say never."
Part of growing is recognizing and retaining the local talent that made the stores so attractive to acquire.
"Our model is to integrate and learn from the people that have become part of the family. Any good acquisition we do, we look back and say, 'OK, what did we learn from them? What can we take and bring back to our network?' And that only happens if you keep the local people," Hannasch explained.
Using Couche-Tard’s first-ever European acquisition of Norway's Statoil Fuel & Retail ASA as an example, he pointed out that four years after the acquisition, the entire Statoil management team, with the exception of the chief financial officer, is intact.
With the new global Circle K brand that Couche-Tard is now in the process of rolling out system-wide, “we're very well prepared to continue to grow internationally, either with our own operations or with great partners," Hannasch shared with CSNews.
THE WALMART OF THE C-STORE BUSINESS
What makes Couche-Tard so unique is its business plan. First, the company uses its size to acquire other stores at a good price. Then, because of its size, Couche-Tard has purchasing power with vendors, according to c-store industry insider Terry Monroe, founder and president of brokerage services company American Business Brokers & Advisors.
"They can get merchandise at a lower price and they increase the bottom line. When it comes to vendors, Couche-Tard is like the Walmart of the c-store business," he said.
Also as part of its business plan, Couche-Tard acquires portfolios that include locations ranging from Class A stores to Class C stores. The company takes the lower-performing stores and sells those to dealers and individual owner-operators, Monroe further explained.
"[Couche-Tard] is smart enough to buy the whole shooting match, all the stores, knowing they only want some of them. They have an outlet for the remaining stores; they turn them over to dealers," Monroe said, pointing out the company can rent the stores to the dealers and then sell them fuel.
Couche-Tard’s plans to continue growing is only going to make the retailer stronger, he predicts.
"The bigger they get, the more power they have with their vendors. That's their business plan. No, I don't think Couche-Tard could get too big," Monroe said.
"They are very good at what they do. They have a good business plan. They know what they want," he continued. "With any company, the only thing that can hurt them … is if they get weak on their people, their infrastructure. They can stretch themselves too thin. That would be their Achilles heel."
Editor’s note: Check out the March issue of Convenience Store News for our full cover story on Couche-Tard, “Growth Spurt.” A digital edition of the issue can be accessed by clicking here.