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Circle K owner Alimentation Couche-Tard grows profits to US$757 million

Alimentation Couche-Tard Inc.’s profits increased from last year in the three months ending Oct. 11, as shoppers consolidated shopping trips to convenience stores amid the COVID-19 pandemic.

The Circle K parent company says it earned US$757 million, or 68 cents U.S. per diluted share, compared with US$578.6 million, or 51 cents U.S. per diluted share, in the same period last year.

The Laval, Que.-based brand says revenues were US$10.66 billion during the quarter, down from US$13.68 billion during the same quarter last year.

Analysts surveyed by Refinitiv expected net income of US$559 million, or 50 cents U.S. per share, on sales of US$11.17 billion.

The company says its same-store merchandise sales grew 4.4 per cent in the U.S., 8.6%  in Europe and 11.4% in Canada.

Couche-Tard’s quarterly report says traffic was soft during the quarter as many people worked from home, but it sold more fuel this summer than in the spring in Europe, thanks to sunny weather.


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Alimentation Couche-Tard subsidiary acquires U.S.-based Pride c-store chain

UnknownColumbus-based Mac’s Convenience Stores LLC, a subsidiary of Laval, Quebec-based Alimentation Couche-Tard Inc., acquired Pride C-Stores Inc. Columbia City-based Pride C-Stores owned and operated seven convenience stores, according to Convenience Store News.

Pride C-Stores, which began as Parish Oil Co., acquired its first convenience store in 1977. In 1983, the company began a bulk fuels operation, serving local residential, agricultural and industrial customers.

It sold the bulk fuels business in 1988 as the company turned its attention to developing its c-store chain. All of the stores operate under the Pride brand and are within 25 miles of the Columbia City headquarters in and around the Fort Wayne metropolitan area.

The stores are located in Auburn, Churubusco, Columbia City, Fort Wayne, Kendallville, Merriam and Warsaw. The locations sell CITGO-branded fuel.

The average parcel size is approximately 1.2 acres, while the average building size is approximately 3,000 sq. ft. Two of the sites have car wash facilities, according to NRC Realty & Capital Advisors.

“We worked very hard to build a ‘best of class’ chain of convenience stores in northeastern Indiana and we have been proud to serve  our customers in these markets. We ultimately concluded for a number of reasons that it was the right time to sell,” said Richard “Rusty” Parish, president of Pride C-Stores.

“Although we faced some headwinds in getting this done, especially in the face of COVID-19, we were able to achieve our objectives, due in large part to the assistance we received  from our team of financial advisors at NRC Realty & Capital Advisors,” he added.

 

 


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Couche-Tard enters Asia with Hong Kong acquisition

UnknownAlimentation Couche-Tard Inc. has entered into an agreement to acquire all the issued and outstanding shares, on a fully diluted basis, of Convenience Retail Asia (BVI) Limited (Circle K HK) for HK$2.79 billion, or approximately $360 million.

Circle K HK operates a network of Circle K-licensed convenience stores, with 340 company-operated sites in Hong Kong and 33 franchised sites in Macau.

In a statement, the Canadian store giant said: “This transaction represents a significant milestone for Couche–Tard as it provides the Company with a platform in Asia from which to launch its regional growth ambitions.”

Circle K HK has the second largest market share in Hong Kong, one of the most economically developed markets in Asia and most densely populated regions in the world. For Couche-Tard, this represents “meaningful room to grow organically.”

In addition, Circle K HK has a strong loyalty program, with approximately 1.6 million “OK Stamp It” members, as well as an established private label program. In addition Circle K has advanced merchandising, technology and supply chain capabilities.

Couche-Tard says it “expects to benefit from Circle K HK’s experienced management team to gain access to further opportunities in the Asia-Pacific region, while also leveraging the team’s insight and knowledge of the high-density urban retail format.”

“I have followed Circle K Hong Kong’s progress closely for decades and deeply admire its leadership team and retail expertise,” said Alain Bouchard, founder and executive chairman of Couche-Tard’s Board of Directors. “I look forward to welcoming their team members and stores into the Couche-Tard family and have no doubt that together we can reach millions more customers in Hong Kongand across Asia as we move forward in our journey to become the world’s preferred destination for convenience and fuel.”

Brian Hannasch, president and CEO of Couche-Tard, added: “Circle K Hong Kong is one of the best convenience store operators in Asia and will be an excellent fit within our company. We are excited to partner further with their highly advanced team in terms of innovation, loyalty, private label, retail execution and ability to grow market share. Upon closing of this transaction, Couche–Tard will reach a milestone in its strategic ambition of entering the high growth Asia–Pacific market with a first-rate management and operations team, which has the credibility, experience and capabilities to support future expansion in the region.”

Victor Fung, chairman of CRA, called it a win-win for both companies: “Our investors will gain from a good return on their investment and Couche-Tard will benefit from a first-class organization of dedicated and loyal team members who have contributed to the success of Circle K in Hong Kong.”

 

Under the terms of the agreement, Couche-Tard will acquire Circle K HK on a cash-free and debt–free basis. The final purchase price will be subject to working capital and other balance sheet adjustments. The transaction is expected to close by December 31, 2020 and will be subject to usual closing conditions.


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Couche-Tard turns 40!

As Couche-Tard marks a milestone birthday, president and CEO Brian Hannasch discusses the Quebec-based company’s ascent to one of the biggest convenience store players on the planet 

1980-Couche-Tard-1980Alimentation Couche-Tard wouldn’t be the retail powerhouse it is today—growing from a single store in 1980 to more than 9,400 convenience stores in North America and 2,700 in Europe (most under the Circle K banner)—without innovation as a trajectory for growth.

Take Couche-Tard’s on-demand bean-to-cup coffee and grab-and-go “Fresh Food Fast” innovations. Both programs have helped to accelerate the convenience store’s credibility as a destination for quality sustenance. Since 2000, the Laval, Que.-based company has also kept the gas on store modernizations, and, more recently, an ear to the ground on learning opportunities with other companies, which has seen it expand into nascent categories, including cannabis. 

Screen Shot 2020-09-28 at 4.31.02 PMWhen it comes to new technology, the convenience sector isn’t exactly known as an early adopter. However, as Couche-Tard’s president and CEO Brian Hannasch shares in our exclusive interview, that is changing. For instance, Couche-Tard is making investments in AI, a digital-based loyalty and upsell program called LIFT and employee training that uses gamification.  Here, Hannasch, who has been president and CEO of Couche-Tard since 2014 and was COO from 2010 to 2014, talks innovation in various forms and Couche-Tard’s philosophy behind it. 

What does innovation in the convenience store industry look like to you?

With our vision to make our customers’ lives a little easier every day, innovation is one of our guiding stars. Historically, the convenience store industry has been less impacted by new technologies than other retail channels—our customers come to us for immediate consumption of products or services that require significant infrastructure, like fuel. However, with new digital possibilities and customer expectations, in addition to the ongoing COVID-19 pandemic, innovation is taking off in the convenience sector and at Couche-Tard. 

Can you give us a peek into the innovation pipeline?

We are working on exciting developments, including frictionless experiences in the stores, the use of AI for pricing and personalization, and other new possibilities, such as home delivery, which make traditional convenience even easier. 

Given the pandemic, how important has home delivery innovation become?

Innovation was already a big focus before COVID-19 hit us, but the pandemic provided an opportunity to accelerate our innovation projects. We are just starting to learn more about home delivery and its role in our business. As of this date, we are piloting it in around 1,000 stores in all the regions in our network (although most are in the U.S.), and across multiple banners. We have also implemented [curbside pick-up service] Click & Collect in 1,000 stores. 

Couche-Tard has continued to expand LIFT. How has the loyalty program been a game-changer?

LIFT provides us with the ability to understand our customers’ purchase histories and to offer them personalized discounts and engagements based on their baskets. The LIFT digital platform is the anchor of our digital store network, delivering personalized value to our customers, increasing engagement and loyalty, and enabling our consumer-packaged goods partners and their media agencies to leverage the platform. 

How so?

Through LIFT, we are able to drive awareness of new brand launches with our business partners and develop brand relationships with customers, while delivering significant growth in a category at the time of purchase.  We also use the LIFT platform to promote our private label, increasing loyalty to these products. We are very pleased with the deployment of LIFT, which is now available in close to 7,600 corporate stores in North America.  We intend to continue deploying LIFT in the year ahead with the former Flash Foods sites in the U.S. and our North America Circle K franchise network.

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How else are you innovating in the area of customer experience?

We have been introducing a new store format based on the Holiday model in North America [Couche-Tard acquired the popular convenience chain in 2017}, and a new store concept in Europe. This is a never-ending process of continuous improvement. These new store concepts not only enhance the look and feel of our locations, they highlight the development of our food program as we look to innovate and elevate prepared fresh food items at our stores. Escalating fresh food service is among our core strategic priorities for growth.  

Let’s talk about using innovation when it comes to the development and training of employees.

Digitization has been key to our growing-together efforts. This year, we fully implemented our digital HR platform to all our North American employees and set the stage to start it in Europe. We also launched gamified training in all our European divisions, focusing on sales techniques and food, that achieved a 90% employee completion rate and led to an increase in basket sizes. This is now being successfully piloted in designated U.S. business units and is a great training tool that we didn’t even imagine 15 years ago. 

Couche-Tard staked its ground in cannabis retail with Canopy Growth, together opening a store in May 2019 under the banner Tweed. How is that going?

The operational results have been strong, and we are happy with this ongoing relationship to open more Tweed stores in Ontario. In July 2019, we also announced a strategic investment in Fire & Flower, the largest cannabis retail operator in Canada. The legal framework doesn’t allow Circle K or Couche-Tard stores to sell cannabis products in Canada. We feel that partnering and investing in experts in the cannabis sector, while contributing our vast expertise as a responsible retailer of age-restricted products, is the best model to learn more about this space and become a leader in the legal cannabis industry.

You often hear the advice “don’t innovate for innovation’s sake.” What philosophies does the company follow when it comes to innovation?

We don’t chase technology for the sake of it but rather to address actual pain-points in the customer journey. We explore new ideas and innovation in a very structured way to ensure an alignment with our strategic objectives. We also make sure innovation is a repeatable process creating value for our customers and a source of learning for the future. It is important for us to have dedicated innovation capacity, to place multiple bets, to be willing to fail and move on, and to nurture a culture of experimentation. We achieve some of this by working closely with start-ups and academia, and sometimes with companies that might be seen as disruptors in our industry. 

For photos and a timeline of the Couche-Tard’s innovation, read the September/October issue of Convenience Store News Canada.

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Couche Tard on hunt for acquisitions but CEO doesn’t get rival’s Speedway deal

couche-tard2-780x520=Alimentation Couche-Tard continues to be on the hunt for acquisitions even as it claims convenience store rival 7-Eleven’s blockbuster US$21-billion acquisition of the Speedway network in the U.S. doesn’t make sense.

Chief executive Brian Hannasch told investors September 2 that the deal announced last month for the 3,900-store network owned by Marathon Petroleum “traded at value, quite honestly, I can’t understand.”

He said potential acquisition deals have been relatively quiet in the quarter but that activity should pick up as the focus on the COVID-19 pandemic lessens.

“Now that COVID has become a bit of the new normal, we are starting to see a little more deal flow … And if the value is there, we’ll certainly take advantage of those opportunities.”

The fragmented U.S. market remains a prime target as are significant opportunities in Western Canada.

Asia-Pacific, including Australia, remains “a strong area of focus due to long-term growth potential.”

“We are exploring several opportunities actively there,” Hannasch said, adding that the pandemic has created uncertainty Down Under.

He said Ampol (formerly called Caltex), which Couche-Tard had previously targeted, has been weaker than expected. Peter Sklar of BMO Capital Markets said he doesn’t believe Couche-Tard will pursue a deal in the near-term because of its weak financial performance.

While there are markets in Europe that are interesting, the region isn’t a priority, Hannasch noted.

Acquisitions are part of Couche-Tard’s strategy to double its size within five years.

Hannasch said its five-year plan remains on track after two years despite the coronavirus.

“I’m pleased that we continue to make good progress on most of our initiatives. While the pandemic has had an impact short-term on traffic patterns and behaviours, there’s a lot of pushes and pulls.”

Couche-Tard’s shares surged 7.5% Sept. 2, after it reported strong first-quarter results after markets closed on Tuesday.

The company said its net profit surged 44% despite a big drop in fuel sales at its convenience stores because of COVID-19.

The Quebec-based retailer that operates the Circle K brand says it earned US$771.1 million or 70 cents per diluted share in its first quarter, up from US$538.8 million or 48 cents per share a year earlier.

Adjusted earnings attributable to shareholders came in at 71 cent per share, up from 40 cents per share forecast by analysts, according to financial markets data firm Refinitiv.

“We had an exceptional quarter, I think, both financially and operationally, as we’ve seen an increase in shopping occasions and solid execution by our teams to take advantage of changing consumer behaviours during this COVID period,” Hannasch told analysts.

Revenues for the three months ended July 19 decreased 31.4% to US$9.71 billion, compared with US$14.2 billion a year earlier and below forecasts of US$10.55 billion.

The retailer said its in-store sales benefited from shoppers buying more, while fuel sales were hurt by lower demand and prices, partially offset by strong fuel margins.

Tobacco sales were strong, especially in Canada.

Same-store fuel volume decreased 21.2% in the U.S., 25.6% in Canada, and 12.4% in Europe.


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Canopy Growth opens cannabis stores in Alberta

Ontario-based Canopy Growth Corp. is preparing to open its first retail cannabis stores in Alberta.

The company is to open 10 stores under its Tweed and Tokyo Smoke banners and says it has additional locations in the pipeline.

Visitors Centre_Tour_jp94Rx9A“With 10 new stores set to open and additional locations in the pipeline, we are thrilled to announce this milestone and excited to bring the Tokyo Smoke and Tweed guest experiences to Alberta for the first time,” Grant Caton, general manager Canopy Growth, said in a statement. “We’ve seen the value brick-and-mortar retail brings to our consumers – welcoming new guests to learn about cannabis and building relationships in new communities – and we’re excited to share our knowledge and industry leadership across the region.”

The stores include seven locations in Calgary and one each in Spruce Grove, Lethbridge and Edmonton. Canopy says it will create more than 100 jobs in Alberta.

The following retail locations are set to open their doors this week:

Tokyo Smoke:

  • Unit 100, 4310 MacLeod Trail SW, Calgary, AB
  • 418 16th Avenue NW, Calgary, AB
  • Unit 101, 1022 17th Avenue SW Calgary, AB
  • 3011 14th Street SW, Calgary, AB
  • Unit 204, 131 Century Crossing, Spruce Grove, AB
  • Unit 104, 1020 9 Ave SE, Calgary, AB

Tweed:

  • 8650 112 Ave NW, Calgary, AB
  • Unit 122, 425 Aviation Road NE, Calgary, AB
  • Unit 130, 333-6th Street South, Lethbridge, AB
  • 10431 82 Avenue, T6E 2A1, Edmonton, AB

Canopy is one of Canada’s largest cannabis producers and retailers. In February 2019, Couche-Tard Inc. entered into a multi-year agreement with Canopy Growth. Through this partnership, the convenience giant said it planned to “lean on Canopy Growth’s cannabis expertise and leverage its experience with other age-restricted products to focus on the safe, responsible and lawful sale of cannabis, consistent with the  legislation enacted by the federal and provincial governments.”

Quebec-based Couche-Tard is vying for a piece of the North American market and is investing heavily, including a partnership with Alberta retailer Fire & Flower. This summer, the cannabis retailer co-located two locations with Circle K stores.

Canopy Growth says its expansion into Alberta will bring its number of retail locations across Canada to a total of 50, with more planned later this year.

-With files from The Canadian Press

 

 


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Ontario’s pot store lottery winners sell shops as more consolidation expected

shutterstock_1140581744More than a year after winning the chance to open one of Ontario’s first cannabis stores through a provincial lottery, Lisa Bigioni has walked away from her Niagara Falls pot shop.

The store had become like a second home and it was painful to leave, but Bigioni wanted to make good on a deal she signed with a large cannabis brand that helped get her shop up and running under the tight deadlines set by the province.

“(Choom Holdings Inc.) offered a whole bunch of expertise that I needed after the lottery, but then in exchange for that, they said, ‘we’d like to buy your store when the time is right.’ The time came and there was a great deal on the table, so here we are,” said Bigioni, who sold to the Vancouver-based company in April for $2 million in cash and $2 million in common shares.

She’s using the proceeds to open her own Stok’d cannabis store chain.

The Alcohol and Gaming Corporation of Ontario, which oversees cannabis retailers, couldn’t say how many of the first lottery store winners are still associated with the shops they opened, but The Canadian Press has counted several that have changed hands _ and experts say more are likely to follow.

Such sales are being replicated by several of Bigioni’s 24 fellow lottery victors from round one, who were not allowed to sell their stores until last December, and 42 from a subsequent lottery.

Fire & Flower / Circle K Co-Located Cannabis Stores - (c) 2020 Fire & Flower Holdings Corp. (CNW Group/Fire & Flower Holdings Corp.)

Fire & Flower / Circle K Co-Located Cannabis Stores – (c) 2020 Fire & Flower Holdings Corp. (CNW Group/Fire & Flower Holdings Corp.)

Fire and Flower (which recently co-located two stores with Circle K) has already scooped up two stores in Kingston and Ottawa, High Tide landed two in Sudbury and Hamilton and Canopy Growth Corp. got in on the action too.

Cannabis retail licences held by lottery winners technically cannot be transferred, but the stores can be taken over by new owners if the buyer applies for and is granted a new licence and authorization to operate the location.

For many of the lottery winners, selling is a no-brainer.

With one transaction they can make millions and rid themselves of the challenges of supply and security, regulatory changes and general hiccups that have come with owning a business in a newly legal sector.

The cannabis companies clamouring for the properties have a lot to gain too.

Many are battling it out across Canada to grab as much of the bricks-and-mortar market as they can. Stores already operating are ideal because they have some name recognition with consumers and save buyers the time and headaches associated with building from scratch.

“It’s certainly attractive on both ends,” said Melissa Gallagher, Canopy Growth’s director of franchising.

Canopy-backed Tokyo Smoke signed a deal in May with lottery winner Christopher Comrie, who operated Central Cannabis in London, Ont., but was based in Toronto.

Tokyo kept Comrie’s staff through an agreement, but chose to switch up the store’s branding and layout.

“The entire process probably took about three weeks in total, and required us to close only for one day, which ended up being a holiday, so it worked out quite well,” said Gallagher.

The experience was so positive that she says taking over more properties from lottery winners “is not off the table,” especially as Tokyo looks to “aggressively” expand.

However, not everyone is in the selling mood.

Hunny Gawri, a realtor who runs the Hunny Pot Cannabis Co. store in downtown Toronto, is keeping his business. He remembers having to turn his phone off after winning a licence in the lottery because so many cannabis brands wanted to partner with him with the potential to buy later.

“A lot of people won the lottery without the resources or the skillset to be able to execute on it and there was a lot of people that were chomping at the bit that had laid the groundwork to be able to roll out a retail chain or were already doing it on the West Coast,” recalled Hunny Pot spokesman Cameron Brown.

“But striking a deal and going with these other brands was not really what Hunny wanted to accomplish.”

So Gawri stuck with his first store and added another five across Canada – all run without partnering with a bigger player.

Brown believes the next six months will be interesting for cannabis retail in the province.

The AGCO said it has received 1,066 retail operator licence applications and 892 retail store authorizations _ both necessary for opening a cannabis store. So far, 116 stores have opened across the province.

Some shops just won’t open because of the length of the approval process and the costs and challenges of running a store, said Brown.

Others, he predicted, will close.

Corey Gillon, the chief executive of Choom, believes Ontario will still see deals like the one he struck with Bigioni, who was a director at the University of Toronto before getting into the cannabis business.

Choom hasn’t bought properties from Bigioni’s fellow winners or from the winners of a second lottery because Gillon said some of the numbers being tossed around have not made sense from a payback or performance perspective.

He believes opening stores from scratch is the best model for Choom overall, but still said, “we’re going to see consolidation in the space.

Brands with several stores may look to expand their footprint by reaching deals with people who only own one or two shops, he said.

“I think there are opportunities and people are already realizing that.”

Read: Couche-Tard vying for a piece of the North American cannabis market


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Business model helps Couche-Tard navigate COVID-19

LAVAL, Quebec — Alimentation Couche-Tard Inc., parent company of Circle K, reported a relatively strong fourth quarter for its 2020 fiscal year despite grappling with the challenges of the COVID-19 pandemic.

Brian Hannasch

Brian Hannasch

“Our agile, decentralized model, as well as the advancements we made in operational excellence this past year, helped us to face the unprecedented challenges of COVID-19 and I’m proud to say, I think we’ve emerged from this historic year a better and stronger company, both financially and culturally,” president and CEO Brian Hannasch stated during the company’s Q4 earnings call on June 30.

“We ended the fourth quarter with strong top-line trends, including 12 weeks of positive traffic, before we endured a significant decline in traffic and fuel volumes with the pandemic stay-at-home orders implemented across our global footprint,” he added.

Looking at the fourth-quarter numbers, same-store merchandise revenue decreased by 0.5 percent in the United States and 6.5 percent in Europe, while increasing 4.7 percent in Canada compared to the same quarter last year.

From a fuels perspective, volumes declined sharply during the first weeks following the stay-at-home orders. For the fourth quarter overall, same-store road transportation fuel volumes decreased 18.3 percent in the U.S., 13.4 percent in Europe, and 23.5 percent in Canada compared to the same quarter a year ago. The sharp decline in volumes was mitigated by higher fuel margins, which benefited from the rapid and steep declining crude prices during the quarter, as well as lower competitive activity at retail.

“Through the implementation of restricted social measures in the various geographies in which we operate, the COVID-19 pandemic had a meaningful impact on our financial results, mostly driven by declining traffic across our entire network,” Hannasch explained.

The retailer saw its convenience store customers change their shopping behaviors, moving to larger basket sizes with more impulse and emergency items, and take-home packages — which partially offset the negative impact of lower traffic.

“We innovated quickly to meet the desire for less touchpoints, as well as different SKUs and package sizes,” he said. “We are placing the health and safety of our employees and customers at the forefront of our decision-making, and we are committed to being part of the solution in our communities where we work and live. I am truly grateful for the courage, care and commitment that our employees are showing toward each other, toward our customers, and the business.”

BEING PART OF THE SOLUTION

As the health crisis spread across countries and regions, Couche-Tard stepped in to “become part of the solution” in its communities, according to the chief executive.

For example, the retailer launched a free coffee, tea or Polar Pop offer for front-line and first-responder workers beginning in March. In addition, it contributed more than 40 million meals to Feeding America in the United States and beginning in June, the company pledged 5 million meals to food banks in Canada. In Europe, Couche-Tard delivered goods to the elderly and impaired, as well as care packages to hospitals and other facilities.

Couche-Tard also worked to innovate rapidly to meet the changing needs of its customers.

“We rapidly developed a click-and-collect model both in Europe and in North America for curbside delivery, and we’ve expanded home delivery to third parties with more than 1,000 sites now having home-delivery capability globally,” Hannasch explained.

The new innovations also included mobile payment options.

“The urgency of the pandemic brought out the best in our company’s ability to adapt the new community of solutions and technology, adjusting to the rapidly changing retail landscape,” he said.

IN-STORE OBSERVATIONS

One of the biggest adaptions for any convenience store operator during the past few months has been the suspension of self-serve items, and Couche-Tard’s locations were no different. Self-serve items were removed in many parts of its network — more prevalent in the U.S. since the retailer does not do a lot of self-serve in Europe.

Despite the change being mandatory in the affected areas, Hannasch observed: “I think it was resounding that the customers preferred the old way; they preferred the self-serve. We saw sales decline in those stores more than we did in stores where self-serve remained in place.”

With the U.S. in the relatively early stages of reopening, the chief executive said it is too early to tell what COVID-19 changes will stick around.

“I think it’s premature to say what the future will bring on, in terms of permanent changes in consumer habits. That said, the grab-and-go, low-touch nature of our ‘Fresh Food Fast’ program could be beneficial to us where we’re delivering quality products, good taste — great taste, actually — that doesn’t need to be handled by our staff in-store,” he said.

POST COVID-19

So far in the first quarter of its 2021 fiscal year, Couche-Tard is seeing a strong increase in merchandise sales as traffic gradually improves week to week.

“Many factors appear to be contributing here but, more notably, we continue to see the move to larger baskets that I pointed out earlier, and see the customer adjusting their shopping habits,” Hannasch pointed out.

“We think there’s some preference for the ease and convenience of our locations, and our channel over some other channels during this COVID period and COVID recovery,” he continued. “We’ve also gained new customers as we stayed open throughout the pandemic to meet their needs for emergency products, impulse buys and grocery items, which became increasingly popular, and we’re seeing some stickiness.”

On the fuels side, the retailer is seeing fuel volumes gradually return, and fuel margins have remained healthy through May and June.

“In recent days, there’s been a resurgence of COVID in parts of our U.S. network, and it is unclear how the virus in the global economy will develop in the weeks and months ahead,” Hannasch said. “So as such, we will continue to adhere to our customary financial discipline and maintain a robust contingency planning.”

As of April 26, Laval-based Couche-Tard’s network comprised 9,414 c-stores throughout North America, including 8,221 stores with road transportation fuel. Its North American network consists of 18 business units, including 14 in the United States covering 48 states and four in Canada covering all 10 provinces.

In Europe, Couche-Tard operates a retail network across Scandinavia, Ireland, Poland, the Baltics and Russia through 10 business units. As of April 26, its European network comprised 2,710 stores, the majority of which offer road transportation fuel and convenience products while the others are unmanned automated fuel stations that only offer road transportation fuel.

In addition, under licensing agreements, close to 2,350 stores are operated under the Circle K banner in 15 other countries and territories, which brings the worldwide total network to close to 14,500 stores.

Originally posted at Convenience Store News. 


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Couche-Tard rolls out new “Fresh Food Fast” program

Like all convenience store retailers, Alimentation Couche-Tard Inc. has adjusted its operations during the COVID-19 pandemic. However, it has not taken its foot off the gas when it comes to key initiatives, such as the rollout of its new food program throughout North America.

Brian Hannasch

Brian Hannasch

The new program, which Couche-Tard calls “Fresh Food Fast,” presents a significant organic-growth opportunity, with expectations for both top-line and margin improvement, according to president and CEO Brian Hannasch.

“We continue to be excited about its potential. In markets where the new program has been available, customer feedback has been very positive, and both food unit sales and overall sales in the stores with the program have significantly outpaced comparable sales at other stores in those same markets,” he reported during the company’s fourth-quarter fiscal year 2020 earnings call, held June 30.

As the world entered the coronavirus pandemic, Couche-Tard moved quickly to cut costs, but there were a few items the company felt were “sacred,” Hannasch explained. These included IT initiatives, new-to-industry builds, and the new food program.

Unknown-1The parent company of Circle K did hit the pause button temporarily on rolling out the program because, according to Hannasch, Couche-Tard did not think “it was prudent” to allow sampling or to conduct training during the health crisis.

“However, we will continue to build out the program, and we continue to install equipment as planned. We laid the groundwork with approximately 500 stores during the [fourth] quarter and continue to expand rapidly toward our target of 1,500 installations for the calendar year and 2,300 stores during the fiscal year,” he stated.

Couche-Tard has resumed training on the new program, and all of its converted c-stores will soon offer the new food assortment.

In addition, the retailer continues to roll out its on-demand coffee program. The U.S. rollout is now complete, and Couche-Tard has shifted its focus to rolling it out across Europe, according to the chief executive, who added that the espresso-based beverage equipment was deployed with 450 machines during the fourth quarter.

Also in Europe, its Froster frozen dispensed beverage program is now available at more than 200 stores. The program has been a Circle K mainstay in North America.

“We continue to see great opportunity to scale this offer in that region, as it’s been a solid driver of incremental trips to our stores, especially in Ireland where we started testing last year, where traction with customers has been impressive, and more recent in the Baltics as we moved into warm summer months,” Hannasch said.

As of April 26, Laval-based Couche-Tard’s network comprised 9,414 c-stores throughout North America, including 8,221 stores with road transportation fuel. Its North American network consists of 18 business units, including 14 in the United States covering 48 states and four in Canada covering all 10 provinces.

In Europe, Couche-Tard operates a retail network across Scandinavia, Ireland, Poland, the Baltics and Russia through 10 business units. As of April 26, its European network comprised 2,710 stores, the majority of which offer road transportation fuel and convenience products while the others are unmanned automated fuel stations that only offer road transportation fuel.

In addition, under licensing agreements, close to 2,350 stores are operated under the Circle K banner in 15 other countries and territories, bringing the worldwide total network to close to 14,500 stores.

Originally published at Convenience Store News. 


Fire & Flower / Circle K Co-Located Cannabis Stores - (c) 2020 Fire & Flower Holdings Corp. (CNW Group/Fire & Flower Holdings Corp.)

Fire & Flower co-locates cannabis stores with Circle K

Fire & Flower / Circle K Co-Located Cannabis Stores - (c) 2020 Fire & Flower Holdings Corp. (CNW Group/Fire & Flower Holdings Corp.)

Fire & Flower / Circle K co-located cannabis stores

Fire & Flower Holdings Corp. is opening two cannabis retail stores adjacent to Circle K locations in the province of Alberta.

In a release, Fire & Flower says it expects “to benefit from high traffic Circle K locations to deliver an unprecedented level of convenience to cannabis customers, maximizing the benefit of the Spark Perks program and Spark Fastlane online ordering services at conveniently located stores.”

In July 2019, Couche-Tard announced it would make a strategic investment in Fire & Flower, providing the Canadian cannabis retailer with additional capital to further accelerate its expansion strategy. Couche-Tard invested approximately $26 million in the form of unsecured convertible debentures to obtain a 9.9% ownership interest in Fire & Flower on a fully diluted basis.

READ: Couche-Tard closes cannabis retailer deal

“Through this strategic investment, we reinforce our intention to become a key player in North America’s cannabis industry,” Brian Hannasch, president and CEO of Couche-Tard, said at the time. “We are excited to see what we can achieve together with Fire & Flower, as we further expand in Canada and look to leverage our presence in the United States and beyond.”

At the time, Fire and Flower has 23 locations and today, with the new openings, it has 51 stores, mostly in Alberta, Saskatchewan and Manitoba, but also in Ontario and Yukon.

The two new stores in Calgary and Grande Prairie are the duo’s first co-located retail stores, but they are looking at “additional opportunities to co-locate cannabis retail st

Fire & Flower / Circle K Co-Located Cannabis Stores - (c) 2020 Fire & Flower Holdings Corp. (CNW Group/Fire & Flower Holdings Corp.)

Fire & Flower / Circle K Co-Located Cannabis Stores – (c) 2020 Fire & Flower Holdings Corp. (CNW Group/Fire & Flower Holdings Corp.)

ores in the future.”

The co-located stores will be owned and operated by Fire & Flower and, in accordance with applicable regulations, are officially separate from the adjacent Circle K stores.

The Grande Prairie store is opening this week and the Calgary store is to open the week of July 13, 2020.

“As we continue to build our relationship with Alimentation Couche-Tard, Fire & Flower is very pleased to be embarking on this initiative together,” Trevor Fencott, CEO of Fire & Flower, said in a statement. “We believe that combining convenient pickup locations with digital engagement offered by the Hifyre platform and Spark Perks program presents our customers with a differentiated value proposition in an increasingly competitive cannabis retail market. This approach to innovation in omni-channel and convenience-oriented cannabis retail differentiates Fire & Flower and positions us well to capitalize on both domestic and international opportunities.”

 

Through its strategic investment with Alimentation Couche-Tard Inc., Fire & Flower has set its sights on the global expansion as new cannabis markets emerge.