Couche-Tard Ramps Up New Fresh Food Concept at Circle K Stores

LAVAL, Quebec — Facing overall traffic declines and challenges driven by the novel coronavirus pandemic, many convenience stores are rolling out new initiatives to draw in customers. At Alimentation Couche-Tard Inc., the parent company of Circle K, the "Fresh Food Fast" foodservice program is chief among its new initiatives.

The retailer is working hard to drive more traffic to its convenience stores through increased awareness of its loyalty programs and ensuring the company remains focused on its core value proposition, President and CEO Brian Hannasch explained during Couche-Tard's first-quarter fiscal 2021 earnings call on Sept. 1.

"A key priority to improving our customer experience and driving organic growth is expansion of our North America Fresh Food Fast program, which we describe as food at scale. This may be the largest endeavor the company's ever undertaken in my career," the chief executive said. 

In May, Couche-Tard had announced that certain preparations for the program's expansion were suspended due to the COVID-19 pandemic.

Now, however, the temporary pause on food store training and openings due to COVID has ended, and the convenience retailer has the program up and running at nearly 875 stores. It remains on target to have 1,500 stores up and running by October.

"Sales at stores with the offer continue to outpace those at non-converted benchmarked stores, and customer feedback has been excellent," Hannasch said. "We also see a halo effect with positive sales in other categories vs. controlled sites."

He acknowledged that COVID-19 introduced "a lot of noise" into the company's results.

"No doubt developing a food culture and executing this each and every day at every site is a big challenge that we don’t take lightly. However, I am pleased with the offer we are developing and believe it will deliver topline margin improvements in the months and years to come," the CEO stated.

The retailer is also capitalizing on the new coffee equipment it installed in U.S. stores in 2019. According to Hannasch, messaging and in-store execution were strengthened to enhance the customer experience — specifically with iced coffee.

In frozen beverages, the company is "aggressively expanding" Circle K's Froster program in Europe. It is now available at 400-plus stores. 

"This offer continues to delight customers and drive incremental trips to our sites, especially where we began testing in Ireland and the Baltics, where we've seen really strong consumer response," Hannasch reported. "We had one store in Lithuania sell over 550 cups in one day."

As of July 19, Laval-based Couche-Tard's network comprised 9,274 convenience stores throughout North America in 18 business units, including 14 in the U.S. covering 47 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 July 19, its European network comprised 2,714 stores. In addition, under licensing agreements, close to 2,350 stores are operated under the Circle K banner in 15 other countries and territories.