Mac's Has the Beef

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Mac's Has the Beef

LAVAL, Quebec -- As part of a new alliance with M&M Meat Shops, Alimentation Couche-Tard INC. customers in Toronto can now buy premium steak at the local Mac's corner store.

Convenience store chain Mac's has added its first Toronto-area M&M Meat Shops to the growing list of food services it provides in a bid to compete in an increasingly blurry world of retail channels. M&M Meat, which sells high-quality frozen prepared food from shrimp to cheesecake, says Mac's offered it superior locations at cut-rate prices in hard to penetrate areas such as Toronto's downtown core, according to the Toronto Star.

"This was a way for us to get into those areas," said M&M Meat Shops co-founder and president Mac Voisin.

Mac's Milk says M&M Meat gives it an edge in the increasingly crowded market for retailers selling convenience. "We started looking about 10 years ago at what we needed to do to refresh the industry. One of the things we identified was a transition into food service," says Dave Rodgers, Mac's vice president of operations for Ontario.

For both parties, it's about trying to meet the growing demands of harried two-income families in search of quality, price and convenience. It's turf that's becoming increasingly crowded.

Other retailers also are searching for the perfect formula that satisfies this challenging list of consumer demands. The trend isn't confined to convenience stores. Grocery stores sell drugs and cosmetics, drug stores sell food, several retailers are experimenting with gas and Wal-Mart sells just about everything.

In the Canadian convenience store industry, one of the biggest threats has come from the integrated oil giants, like Imperial Oil, which began adding convenience stores to its Esso stations in the late '80s after profit margins in retail gas sales fell to razor thin levels. "What happened to the whole convenience business is it started to shift away from the traditional stores to gasoline stations," says gas-convenience consultant Hugh Large, of Hugh Large & Associates Inc., in Ballantrae, Ont., northeast of Markham.

The c-store world was also grappling with other pressures. Cigarette sales are still the mainstay of the business, accounting for just over a third of all sales and a fifth of the profit, but margins have been declining as regulatory requirements rise. "It represents a risk to the business," Rodgers says.

Owned by Laval-based convenience store retailer Alimentation Couche-Tard, Mac's is part of a fast-growing company that is quickly consolidating Canada's fragmented industry and penetrating the United States. With 2,145 stores and sales of $2.5 billion for the first nine months of its fiscal year, Couche-Tard also is profitable with earnings of $55 million for the period.