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Couche-Tard’s new initiatives designed to meet rising customer expectations

Screen Shot 2019-09-10 at 11.04.38 AMAs Alimentation Couche-Tard Inc. has built up its Circle K footprint through a series of global acquisitions, the company has begun rolling out several in-store initiatives to meet its customers’ rising expectations.

Chief among those have been foodservice-related programs, such as the company’s coffee platform and hot dog offer — both of which have spelled success for the Laval-based parent company of Circle K. Additionally, in the past few quarters, Couche-Tard began upping the ante with new digital and loyalty solutions, including its Lift upselling program and recently launched Easy Pay rewards program.

“I’m pleased with the work leveraging our loyalty programs, like Lift and Easy Pay, and unique promotional activity and gamification across the network — all part of our global efforts to drive more traffic to our stores and make our customers’ lives just a little bit easier every day,” Couche-Tard president and CEO Brian Hannasch said during an earnings call last week for the company’s first-quarter fiscal year 2020.

Circle K’s Easy Pay program rolled out to all of its U.S. network, with the exception of Holiday Stationstores, during the latest quarter. The retailer expects to complete the rollout at the Holiday locations in the fourth quarter.

Hannasch reported that the company is pleased with the pilot tests of the program, but it is too early to assess the national rollout. The retailer will be testing a variety of discount levels, as well as store-level incentives, to understand how to maximize traffic and penetration, he explained.

As for Lift, the in-store upsell tool, it was in almost 5,750 of the company’s U.S. convenience stores by the end of the quarter, and is beginning to hit sites in Canada.

“We think with both of these, we are just beginning to scratch the service,” Hannasch said. “With regards to Lift, we are pleased with the early results and we are seeing a very good conversion rate — averaging over 8 percent of customer transactions incorporating some sort of Lift promotion.”

To extend its reach, the retailer is piloting home delivery in Texas with service from more than 160 stores in the Houston area. Customers can order a variety of items, including snacks, beverages and age-restricted items, and receive them in less than an hour.

“We are monitoring this closely to measure customer acceptance and how it can play out in other markets,” Hannasch said, adding that the company will pilot the service in different geographies with different partners in the coming quarters.

IN-STORE INITIATIVES

Inside the store, Couche-Tard continues to grow its offerings.

On the foodservice side, the retailer’s coffee-program expansion continues, with more than 9,000 coffee machines installed in almost 4,000 locations in the United States this year.

“We continue to see strong sales and margin results, and customer feedback has been extremely positive,” Hannasch said, noting that full installation is on track to be completed by the end of calendar year 2019. “It’s a great example of when we test, we find something that works and scale it rapidly.”

Packaged beverages remain an especially strong category, with energy drinks, water and ready-to-drink-coffee contributing notably to same-store sales growth.

Couche-Tard is also seeing emerging growth in the alcohol space with alternative products such as hard seltzers, reflecting changes in consumer behavior.

“We are committed to staying ahead of the curve,” the chief executive explained.

In its North American food program, the retailer launched a $1 hot dog promo that has delivered double-digit sales increases. Premium hot dogs are driving unit growth as Circle K converts more customers to its food program, according to Hannasch.

“Our Top Dog signature hot dog program is now in nearly 570 stores and we are preparing for a launch across all U.S. business units in the coming months,” he shared.

Moving to the backbar, Couche-Tard is seeing strength in alternative tobacco segments in the U.S. and Canada, and in markets in Europe where the company is allowed to launch such items.

“We also remain committed to traditional tobacco products, and this quarter we continue our significant expansion of backbars to more locations to not only display tobacco cigarettes, but make room for the tremendous amount of innovation we are seeing in the category,” Hannasch explained.

LEARNINGS FROM EUROPE

The customer experience both inside and outside the c-store is a priority for Couche-Tard and its Circle K network on both sides of the Atlantic Ocean.

“In Europe, we now have about 135 newly redesigned Circle K stores across eight different countries,” the CEO said. “[The work] is a complete redo of the site with attractive designs and food offerings that engage our customers.”

Feedback thus far has been very strong, according to Hannasch.

Couche-Tard also has found success with direct mailers and gamification engagement tactics in driving traffic in Europe. The company recently launched these efforts in Canada and plans to bring them to the U.S. later in the year.

“We have more tools than ever in the toolbox,” Hannasch said.

As of July 21, Couche-Tard’s network comprised 9,792 convenience stores throughout North America. Its North American network consists of 19 business units, including 15 in the U.S. covering 48 states and four in Canada covering all 10 provinces. In addition, through CrossAmerica Partners LP, Couche-Tard supplies road transportation fuel under various brands to more than 1,300 locations in the United States.

In Europe, Couche-Tard operates 10 business units across Scandinavia, Ireland, Poland, the Baltics and Russia. As of July 21, Couche-Tard’s European network comprised 2,706 stores. In addition, under licensing agreements, approximately 2,250 stores are operated under the Circle K banner in 16 other countries and territories.

Originally published at Convenience Store News.


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Couche-Tard celebrates global Circle K rebranding accomplishments

Circle K Logo Sm_121317In September 2015, Alimentation Couche-Tard Inc. embarked on a journey to unite its vast convenience store network under one umbrella: a new global Circle K brand.

The move followed several acquisitions Couche-Tard made in Europe, including the retail assets of Statoil Fuel & Retail ASA in Norway, Topaz in Ireland and Shell in Denmark; as well as its purchase of The Pantry Inc., parent company of Kangaroo Express, in the southeast United States.

Now, three years in, the Laval-based retailer has reached a significant milestone in the journey, Couche-Tard President and CEO Brian Hannasch announced during the company’s fourth-quarter fiscal 2019 earnings call in July.

According to the chief executive, Couche-Tard “has made tremendous progress” this year expanding the global Circle K brand to more than 5,600 stores in North America and more than 2,000 stores in Europe.

“The most exciting benchmark this quarter was the finalization of the rebranding project in Europe, as Ireland is now complete,” Hannasch said, adding that “the march west” in the U.S. is proceeding at a rapid pace.

Approximately 98% of the company’s sites in its U.S. Rocky Mountain Business Unit and 550 stores — roughly 80% — in the Texas Business Unit are now sporting the new global Circle K brand.

Couche-Tard expects to finish the rebranding efforts in Texas, which are mostly CST sites, in fiscal 2020. In addition, the Grand Canyon Business Unit — previously the company’s Arizona Business Unit — is more than halfway completed.

“This ambitious rebranding strategy, which began about three and half years ago, continues to be a real win for our business,” Hannasch said. “With our key partners, we are now able to leverage national promotional campaigns and gain penetration in our private label products.

“For our customers, the aided and non-aided awareness across the globe has been outstanding,” he continued. “For our team members, there is now a foundation for our shared employee culture and pride in Circle K — which is probably the best payoff of all in this journey.”

CIRCLE K FUEL BRAND

In the fourth quarter of fiscal 2019, Couche-Tard also continued to grow its Circle K fuel brand. In Europe, the retailer is almost finished converting its Statoil, Topaz and Shell locations to the Circle K fuel brand. In the U.S., 900 sites were offering the brand by the end of the fiscal year.

“This unification of the Circle K brand inside our stores and at our fuel islands is contributing topline growth, and our easy pay ACH program — which gives customers a discount on fuel — is growing in penetration every day,” Hannasch noted.

As of April 28, Couche-Tard’s network comprised 9,866 convenience stores throughout North America, including 8,629 stores with fuel. 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 addition, through CrossAmerica Partners LP, Couche-Tard supplies road transportation fuel under various brands to approximately 1,300 locations in the U.S.

In Europe, Couche-Tard operates a broad retail network across Scandinavia, Ireland, Poland, the Baltics and Russia through 10 business units. As of April 28, Couche-Tard’s European network comprised 2,709 stores.

In addition, under licensing agreements, more than 2,150 stores are operated under the Circle K banner in 15 other countries and territories, which brings the worldwide total network to more than 16,000 stores.

 

Originally published at Convenience Store News. 


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Circle K partners with delivery service in Houston

Circle K Logo Sm_121317Circle K is joining the list of convenience store chains that offer delivery.

The convenience store retailer has partnered with Texas-based Favor to add the service to more than 160 stores in the Houston metropolitan area.

Customers can order a wide variety of products, including snacks, beverages, beer and receive them in less than an hour. There is no minimum order.

“We are excited to partner with Favor and to see our Circle K stores in the metro Houston area venture into home delivery,” said Paul Rodriguez, vice president of Circle K Texas.

To order beer and other items, customers can search for “Circle K 21+” in the Favor mobile app or at favordelivery.com. Circle K 21+ delivery is available 7 a.m. to 11 p.m. on Monday through Friday; 7 a.m. to 12 p.m. on Saturday; and 12 p.m. to 11 p.m. on Sunday.

New Favor users will receive free delivery for the first 30 days, after which time there is a $3 delivery fee.

The retailer plans to expand delivery across the state to 550-plus Circle K stores later this year. Circle K is a wholly owned subsidiary of Canada-based Alimentation Couche-Tard Inc.


Circle K Mexico apologizes for sexist ad

Circle K Mexico is apologizing for an ad on “Secretary Day” promoting a deal on chocolate, red wine and condoms.

The convenience store brand said in statement that it did not intend to “promote any stereotype” and highlighted its “promise to be a business that doesn’t discriminate on the basis of gender.”

The since-deleted ad was published July 15 on Circle K Mexico’s Twitter account. It depicts a cartoon image of a secretary’s legs next to the phrase “If you know what I mean” in English and a wink emoji. One combo deal included wine, condoms and a Milky Way for 199 Mexican pesos (about $10).

Mexican Sen. Patricia Mercado tweeted that it was a “sexist ad.”

Holidays that celebrate various professions are common in Latin America, particularly Mexico

 


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Circle K Stores begin piloting Holiday’s grab-and-go concept

Screen Shot 2019-07-17 at 5.18.39 PMIt may appear that Alimentation Couche-Tard Inc. has hit the pause button on acquisition activity after a busy few years; however, the retailer is not standing still.

The Laval-based convenience store operator has had its plate full with the rebranding of its retail network to one new global Circle K brand and has been making progress integrating its last two acquisitions: San Antonio-based CST Brands Inc. and Bloomington, Minn.-based Holiday Stationstores Inc.

“The performance of same-store sales in the CST network, both in the U.S. and Canada, continued to be a strong network leader throughout the year,” Couche-Tard President and CEO Brian Hannasch reported during the company’s fourth-quarter fiscal year 2019 earnings call on July 10.

“In addition, the annual synergies run-rate surpassed Couche-Tard’s target of $215 million over the three years following the transaction — which is one year earlier than planned,” he noted.

These synergies resulted in reductions in operating, selling, administrative and general expenses; as well as improvements in road transportation fuel and merchandise distribution and supply costs, the company noted in its earnings release.

“I want to thank all of our team members directly involved in this impressive achievement, including our operations, shared services, finance and HR teams,” Hannasch said. “As we continue down this road, I am confident we’ll realize even more synergies.”

THE HOLIDAY PLAN

In the integration of the Holiday network, the CEO said several reverse-synergy initiatives are “well underway, with measurable results now impacting our bottom line in the broader network.”

Over the past year, several of Couche-Tard’s business units in North America have adopted best practices and products from Holiday. This includes the integration of Holiday’s private-label beef jerky line and its “Crispy” treats program, according to Hannasch.

Several business units also have implemented Holiday’s top-performing promotional offers. For instance, during the fourth quarter, most of the North American business units introduced the first wave of Holiday’s smart-value marketing program.

“Based on early results and limited SKU participation, this program looks to be capable of delivering significant return on incremental sales once fully implemented networkwide,” Hannasch said.

“We continue to work actively on integrating operational excellence programs from Holiday, including a key focus on a storefront tool that helps store managers have the resources and information they need in one place, in a well-structured and prioritized way, so that it can be effectively executed,” he continued.

Additionally, Couche-Tard recently began piloting Holiday’s grab-and-go foodservice concept in select markets. The pilot draws on the full array of Holiday’s food offers, including its menu assortment, equipment theater and operating model.

As of April 28, Couche-Tard’s network comprised 9,866 convenience stores throughout North America, including 8,629 stores with fuel. 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 addition, through CrossAmerica Partners LP, Couche-Tard supplies road transportation fuel under various brands to approximately 1,300 locations in the U.S.

In Europe, Couche-Tard operates a broad retail network across Scandinavia, Ireland, Poland, the Baltics and Russia through 10 business units. As of April 28, Couche-Tard’s European network comprised 2,709 stores.

In addition, under licensing agreements, more than 2,150 stores are operated under the Circle K banner in 15 other countries and territories, which brings the worldwide total network to more than 16,000 stores.

Originally published at Convenience Store News. 


Circle K stores in Arizona and Nevada add Bitcoin ATMs

Circle K Location_Sm_061219Customers at select Circle K convenience stores in two U.S. states will be able to access Bitcoins.

The c-store retailer teamed with DigitalMint to install Bitcoin kiosks at 20 Circle K locations throughout Arizona and Nevada, reported Retail Customer Experience.

“We are thrilled to be partnering with a respected organization like Circle K,” said Marc Grens, president and co-founder at DigitalMint. “This partnership opens the door for massive expansion of bitcoin access to new markets around the globe.”

The move marks the largest expansion of DigitalMint to date, according to the company. The Arizona Bitcoin ATMs are located in Phoenix, Mesa, Tempe, Tucson, Flagstaff, Surprise and Maricopa. Its Nevada ATMs are in Las Vegas.

“Partnering with DigitalMint allows us to provide our customers with seamless access to Bitcoin, at a very reasonable price,” said Joel Konicke, category manager at Circle K Stores Inc.

Circle K Stores is owned by Laval, Quebec-based Alimentation Couche Tard Inc.

DigitalMint is a Chicago-based chain of Bitcoin ATMs and teller windows. In the nearly five years since it was founded, DigitalMint said it has grown to 250 locations in 25 states.

Originally published at Convenience Store News. 


Innovating and prioritizing are the keys to c-store digital transformation

Ed Collupy of W. Capra Consulting Group moderates an IT think tank panel at the 2019 Conexxus Annual Conference.

Ed Collupy of W. Capra Consulting Group moderates an IT think tank panel at the 2019 Conexxus Annual Conference.

Change is never easy. When it comes to the convenience channel, the same can be said about digital transformation.

“Digital is not just a marketing channel or a fad,” said Ed Dzadovsky, vice president, North America IT, at Circle K, the global retail banner of Alimentation Couche-Tard Inc. “We are trying to figure out what it means for us.”

Speaking on a panel with other c-store IT leaders at the 2019 Conexxus Annual Conference, Dzadovsky noted that the challenges of digital transformation are not around focusing on the customer, but rather focusing on the customer experience.

As he pointed out, digital transformation is creating new ways to live, work and play.

“When have we done that in the c-store space?” he asked, adding that as a customer, the convenience store experience has not changed significantly for him.

Bringing his previous experience from McDonald’s into convenience retailing with Circle K, Dzadovsky shared several lessons he’s learned:

  • Standardization is key.
  • Flexible technology pays off when a company is ready to make a big move.
  • Nailing crossfunctional governance is essential.
  • Focus on “no regret” moves to get in the game with a minimal viable product.

He also advised that it is the IT team’s responsibility to keep the executive leadership team focused on standardization and not chase “the shiny objects.”

ENGAGING & PRIORITIZING

But how do you get the IT team engaged with the rest of the overall business?

According to Jim Wenner, vice president of IT at Sheetz Inc., the first step for the Altoona, Pa.-based convenience store chain was getting the IT team members out of the office. Sheetz encourages its IT department to develop one-on-one relationships with other members of the organization.

“We live in the world of technology, but our business doesn’t,” Wenner said.

One of the challenges of the IT department, Wenner pointed out, is figuring out if it is putting the department’s finite resources in the right places. To get the answer, retailers need to have a written IT plan or strategy, and there needs to be business options.

That’s where technology crosses over into being a “magical balancing act,” as Tom Dransfield, IT director at Kent Cos., called it. Midland, Texas-based Kent Cos. is the parent company of Kent Kwik convenience stores.

The balancing act, Dransfield explained, is comprised of four building blocks:

  1. Ease of use — When technology is too cumbersome or difficult to use, adoption stalls and, if that technology is customer facing, sales are affected.
  2. Reliability —  Businesses are more likely to know when technology doesn’t work, not when it does.
  3. Security — To sleep better at night, retail IT team members need to stay in contact with third-party support vendors to ensure they are following acceptable practices, adopt the principle of least privilege, and encourage security as a culture within the business.
  4. Scalability — When the business focuses on growth, it doesn’t want to double support.

INNOVATING

When thinking about retail technology, the first word that often comes to mind is innovation. However, it needs to be the right innovation, the panelists urged.

“The most important thing with innovation is that it is bringing value to the business and you’re not just innovating for innovation’s sake,” said Sorin Hilgen, chief technology officer at Westborough, Mass.-based Cumberland Farms.

Innovation that adds value includes new products and processes, changes that help retailers to better connect with guests and meet expectations, and revisions to internal processes, Hilgen explained.

He believes the best approach to innovation is through a five-step design-thinking process:

  1. Empathy: Truly understand the problem you are trying to solve.
  2. Define: Describe the actionable problem statement.
  3. Ideate: Identify the solutions.
  4. Prototype: Develop quick, scaled-down solutions to experiment.
  5. Test: Execute and measure multiple test phases.

Cumberland Farms takes a grassroots approach to innovation: It can happen anywhere and at any time. “You can’t really plan innovation,” Hilgen said.

And ensuring successful innovation takes some work. He also advised retailers to:

  • Establish a training program and immerse the culture of innovation across the whole organization;
  • Empower employees to come up with ideas;
  • Fail fast and fail often; and
  • Take risks and learn from failure.

The 2019 Conexxus Annual Conference took place April 28 to May 2 at the Loews Vanderbilt in Nashville. Originally published at Convenience Store News. 


Circle K partners with District Ventures to showcase Canadian entrepreneurs

District Ventures, which is led by renowned Canadian entrepreneur Arlene Dickinson of Dragon’s Den fame, is partnering with Circle K to ensure Canadian-made food and beverage products are more accessible to consumers.

Through this new venture, entrepreneurs who have received capital and programming from District Ventures will be listed in more than 400 Circle K locations in Ontario starting May 1.

Circle K Launch_POSThe first brands entering Circle K under the newly formed partnership are Bow Valley BBQ from Canmore, AB, Little Tucker from Calgary, AB, Maze Bar from Toronto, ON, and Zak Organics from Moose Jaw, SK.

“We are constantly seeking ways to push the envelope for Canadian brands in the food, beverage, health and wellness sectors to help them grow and prosper,” says Arlene Dickinson, CEO, District Ventures. “With Circle K, we have a great opportunity to assist entrepreneurs by expanding their retail distribution in addition to providing high-quality Canadian products to consumers in the growing convenience store market.”

District Ventures helps companies with capital, marketing and programming in the food, beverage, health and wellness consumer space. Twice a year the group invests $150,000 with 10 Canadian food/beverage and health/wellness entrepreneurs in exchange for a minority equity stake of their company.

The entrepreneurs participate in a five-month accelerator program in Calgary that is designed to rapidly increase valuation through sales, distribution, and marketing support. In turn, through mentorship and association with District Ventures, these CPG companies are well positioned in the marketplace. The new partnership with Circle K is one such example.

“At Circle K, we are proud to bring innovative and refreshing Canadian-made products to the over 14 million people who visit our stores every month,” says Steve Pitts, vice president Circle K Ontario. “The new partnership with District Ventures helps fulfill our mission of making our customers’ lives a little easier every day by offering them convenient and healthy food options and by supporting the entrepreneurs in the communities where we work and live.”


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Mac’s Convenience Stores rebranding as Circle K

The rollout will begin across Canada in May 2017 Read more