Dive brief:
- Alimentation Couche-Tard plans to add 750 company-operated Circle K convenience stores to its network over the next five years, executives said during the company’s annual investor meeting on Wednesday.
- The stores will be a mix of new builds for the industry and small acquisitions, a Couche-Tard spokesman said in a statement. Most of the sites will be in North America, particularly the U.S., Couche-Tard’s biggest market by far, and the first 100 new builds will be completed by 2026, added President and CEO Alex Miller.
- NTI’s updated goals are part of it Couche-Tard’s new Core + More strategyin which the company will focus on strengthening key platforms while seeking targeted investment opportunities to drive profitability and growth.
Diving knowledge:
Industry insiders have been wondering what Couche-Tard’s next big move would be after the Canadian retailer withdrew its nearly $50 billion takeover bid from Seven & i Holdings, the parent company of 7-Eleven, last summer. For now, it looks like the industry will see Couche-Tard, the second-largest convenience store retailer in the US, increase its organic growth dramatically.
The company currently has a portfolio of about 1,000 stores in various stages of development, Aaron Brooks, Couche-Tard’s senior vice president of real estate and fuel customers, said during the meeting. But Couche-Tard is keeping its five-year target at 750 to “remain disciplined,” he added.
Both Miller and Brooks, who touted plans to open Couche-Tard three years ago 500 new stores by 2028, said Wednesday that the increase in new construction comes from seeing those locations significantly outperform legacy stores, particularly in sales in core categories such as food, nicotine and fuel.
“These places … they sell a lot of food, they sell a lot of merchandise, they do a lot of volume,” Miller said.
While new construction and organic growth are the priority, Couche-Tard also intends to reach the 750-store goal by targeting operators with 10 stores or fewer, Brooks said. He added that Couche-Tard will make more small acquisitions this year than ever before.
“If there’s a quality asset that we can buy with multiple upside and plug it into our economies of scale at a faster rate than we can build, we’re buying,” Brooks said.
Couche-Tard plans to keep up with larger mergers and acquisitions for locations not included in the goal of 750 new stores, mostly by buying regional chains, Brooks said. He emphasized that Couche-Tard continues to see upside in this type of acquisition.
“The main message is that we’re going to continue to focus on what we know and what we’ve done well over the decades,” Brooks said.
