When Alimentation Couche-Tard Inc. was presented with CSD’s Chain of the Year honors in 2007, the company’s smart, strong growth was cited as the foundation for the honor.
A little more than two years later and not much has changed. The company is still regarded as one of the savviest marketers in two countries, and while other companies are struggling to remain solvent, Couche-Tard is evaluating opportunities to acquire distressed chains. In fact, the operator of Circle K convenience stores is seeking to double the amount of c-store outlets it operates in the U.S. and Canada during the next few years.
Laval, Quebec-based Couche-Tard, the second-biggest convenience store chain in the U.S. with 3,858 stores in 43 states and the biggest in Canada with 2,048 stores across 10 provinces wants to have stores in almost every U.S. state. “We won’t be in Alaska. Aside from that we’re interested in being everywhere [in the U.S.],” the company’s President and CEO Alain Bouchard said.
The company operates under the Couche-Tard, Mac’s, Circle K and On the Run banners and employs more than 52,000 people. Its fiscal 2009 total revenues exceeded $15.7-billion with net earnings of $254 million representing a 34% increase compared to the previous year.
These numbers could increase significantly over the next few years as the company continues to execute its aggressive expansion plans.
“How big will we get? Well, my successor in 10 years will have to decide that,” Bouchard told a press conference after the company’s annual meeting. He added that the U.S. convenience store market is fragmented, “with the big players owning about 20% of the market,” which puts Couche-Tard in a position to acquire more stores from smaller chains and independent owners.
In the U.S., Bouchard said, there are another “seven or eight chains of around 1,000 stores that might interest me.”
Marked by Steady Growth
Despite even the harshest economic environments, Couche-Tard has a knack for finding a good deal. Earlier this year the chain acquired the trademark rights to ExxonMobil’s “On the Run” convenience stores, as well as 43 stores owned and operated by ExxonMobil and 444 of their franchised stores in the rest of the U.S. It was the latest in a string of acquisitions it’s made over the last 29 years.
Bouchard launched Couche-Tard with one store in 1980. In 1986, with a network of 34 stores, a predecessor of Couche-Tard completed an initial public offering and listed its shares on the Montreal Exchange. After establishing a leading position in Quebec, Couche-Tard expanded through internal growth and acquisitions in Ontario and Western Canada in 1997. In May 1997, Couche-Tard acquired from Provigo Inc. 245 Provi-Soir stores in Quebec and 50 Wink’s stores in Ontario and Western Canada.
In April 1999, Couche-Tard acquired 980 stores in Ontario and Western Canada operating under the Mac’s, Mike’s Mart and Becker’s banners through the acquisition of Silcorp Limited. Beginning in 2001, Couche-Tard moved into the U.S. market. In June 2001, the company completed its first U.S. acquisition when it purchased 172 stores under the Bigfoot banner in Indiana, Illinois and Kentucky. In August 2002, Couche-Tard acquired 287 stores from CSD’s 1999 Chain of the Year winner Dairy Mart Inc., also located in the Midwest.
The following year in December 2003, Couche-Tard made its biggest splash in the U.S. market, acquiring the Circle K brand, which included 1,663 Circle K stores in 16 states and an additional 616 franchised and licensed units.