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Couche-Tard Pushes into Toronto

QUEBEC -- Convenience store giant Alimentation Couche-Tard Inc. is planning a major push into metropolitan Toronto, where it hopes to add hundreds of Mac's outlets in the coming years, reported the Montreal-based Financial Post.

"There's room and the growth is there" in Canada's largest urban area, said Stephane Gonthier, vice president, operations for Ontario, where the company has 620 Mac's stores and another 120 Daisy Marts. "I can see opening 20 to 25 locations per year, easily, for the next five years" in Ontario with more than half in the Greater Toronto area and "a focus on downtown Toronto. We want to significantly improve our market share, that's for sure. The objective in the GTA is to be on every corner, to become more dominant."

Couche-Tard operates 240 stores from Burlington to Oshawa, compared with 340 in its home base of metropolitan Montreal, an area with just over half the GTA's population. "There's no reason we shouldn't get the same per capita" store count, Gonthier said, which would imply more than doubling the number of stores in and around Toronto.

But the company will run into intense competition in Canada's most lucrative and populous market. Other major Canadian retailers, including Canadian Tire, The Bay and Shoppers Drug Mart, are adding convenience foods to their downtown stores.

"I think it will be a fight," said Richard Talbot, president and managing director of Toronto-based retail consultancy Talbot Consultants International. "Everybody has perceived there's a bit of a gap in the market."

Talbot said since large grocers pulled out of smaller urban locations to focus on large-size stores -- and defend against Wal-Mart -- there has been a vacuum left in urban neighborhoods. "This has provided major opportunities for convenience stores. The trouble is a lot of other people have seen the opportunity."

That means Couche-Tard will face a fight for pricey and scarce real estate. "They're entering the one market where they'll meet the biggest test," he said.

It's the latest challenge for a company that has grown into the fourth-largest convenience store operator in North America with 4,881 stores, mostly by successfully integrated acquisitions, including Ontario-based Silcorp Ltd. in 1999.
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