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Couche-Tard Seeks Growth in U.S. and Abroad

LAVAL, Quebec -- According to CEO Alain Bouchard, Alimentation Couche-Tard is negotiating acquisitions in all of its five U.S. markets, reported the Canadian Press.

"We have identified at least one network in each of our markets, with which we are in discussions," Bouchard said after the company's annual meeting, adding that the chains have from 10 to 100 stores each.

He said the U.S. corner grocery market remains very fragmented, as the top 10 chains have a total of only 24 percent of the market. "There are lots of files on the table," Bouchard said, adding that the retailer also has its eyes abroad.

With its acquisition of the 2,290-store Circle K network completed last December, Couche-Tard, based in Quebec, also inherited more than 4,000 stores operating under a Circle K license in six Asian countries and Mexico. However, Bouchard said 3,000 of the stores don't provide any returns to Couche-Tard, and the rest provide only about $12 million to $15 million a year in royalties.

The company will host foreign franchise holders in Las Vegas next month to plan an international expansion.

Bouchard said Couche-Tard expects to realize sooner than previously expected the annual synergies of $50 million from the Circle K takeover.

In the first quarter previously announced, sales from the United States accounted for 76 percent of the total $1.9 billion revenue, a proportion that will probably increase as expansion occurs mainly in this country. Besides acquisitions, Couche-Tard has plans to open 70 stores and 75 restaurants, either its own or under franchise. It is allied with Subway and Dunkin' Donuts.

Last Friday Couche-Tard announced the acquisition of 22 gas stations from Shell Oil in Phoenix for $33 million, and plans to convert them into Circle K stores.

Bouchard also revealed that 175 of the company's stores in the southern United States were affected by the two recent tropical storms, from power outages to lost roofs. Most of the $20 million in damage is covered by insurance, however.
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