Couche-Tard Shifts Into Construction Mode
LAVAL, Quebec — Over the past several years, Alimentation Couche-Tard Inc. has been busy building up its global convenience store network through acquisitions. This fiscal year, however, organic growth is also a focus for the company.
During the second quarter of its 2020 fiscal year, the Laval-based parent company of Circle K completed the construction of 20 stores and the relocation or reconstruction of seven stores, reaching a total of 48 stores constructed since the beginning of fiscal 2020. As of Oct. 13, another 49 stores were under construction and are expected to welcome customers in the upcoming quarters.
While pursuing organic growth, Couche-Tard also remains focused on acquisition opportunities — big and small. During its latest quarter, the company acquired one company-operated store, reaching a total of nine stores acquired since the beginning of fiscal 2020.
After the close of the second quarter, the company reached a deal to acquire 17 c-stores from a franchise operator. The stores operate under the Holiday banner in South Dakota and Minnesota. This transaction is on track to close in the third quarter of fiscal 2020.
Along with network expansion, rebranding continues to be a priority for Couche-Tard. This fall marked the four-year anniversary of the retailer's initiative to bring the new Circle K brand to its global network. The project kicked off in September 2015.
"As we enter our fourth year of the Circle K rebrand project, I couldn't be prouder of the work that we've done across the network," President and CEO Brian Hannasch said during the company's second-quarter fiscal 2020 earnings call on Nov. 28. "Store conversions in Europe have now been fully completed, and we're more than 80 percent complete in North America with the sites displaying the new Circle K brand."
Many of its North American business units have hit the 90-percent rebranding mark, including the Heartland, Texas and West Coast business units in the United States. In Canada, more than 600 stores have been rebranded in Central Canada and 250 stores now sport the global Circle K brand in Western Canada.
"As I previously said, operating under one global brand brings a number of advantages, from increased brand awareness with customers, employee pride and then again, leveraging our scale across procurement, private label and national marketing campaigns," Hannasch explained.
As of Oct. 13, Couche-Tard's network comprised 9,815 convenience stores throughout North America. Its North American network consists of 19 business units, including 15 in the United States covering 48 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. Its European network comprised 2,708 stores. In addition, under licensing agreements, approximately 2,280 stores are operated under the Circle K banner in 16 other countries and territories, which brings the worldwide total network to more than 14,800 stores.
The total excludes CrossAmerica Partners LP's network, which Couche-Tard recently sold to investment entities controlled by Joe Topper, the founder of Allentown-based CrossAmerica, in the third quarter.