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Column: Couche-Tard steps on the gas with food-to-go

Convenience store operator focuses on food strategy with recent acquisitions

We look at how Couche-Tard is building out its food-to-go capabilities.

Strong first quarter with solid sales and profit growth

Couche-Tard’s first quarter merchandise revenues increased by 9.8% to $2.8 billion, with same-store merchandise revenues up 1.4% in the U.S. and Europe, and down 0.2% in Canada. Net earnings increased by 13.0% to $364.7 million. This was a strong performance by the retailer, with fuel volumes also up 15.8%.

Completed acquisition of CST Brands

At the end of the quarter the retailer completed the acquisition of CST Brands, adding over 1,200 stores to its network. Couche-Tard is pushing ahead with the integration of the business, including focusing on delivering cost synergies and optimizing CST’s strength in private brand development.

Optimizing CST’s strengths in food-to-go

CST also had a well developed fresh food program that Couche-Tard is looking to learn from as it advances its food-to-go initiatives. This includes its made-on-site program, which is similar to the made-to-go program that Couche-Tard had been developing with its fresh bakery offer and its Nice N Easy sandwich and pizza chain.

Acquisition of Holiday Stationstores will bring new foodservice capabilities

With a global network, the retailer is able to lift and transplant programs across markets. Recently, it took a concept out of Mexico it had been piloting in Ireland and launched it within five sites in Norway. Couche-Tard will also gain insights from its acquisition of Holiday Stationstores, which is expected to close in Q3. That business operates with a strong foodservice culture and has developed a commissary-based food-to-go offer.

Piloting programs in North America

As part of its enhanced focus on food-to-go, the retailer has been running a number of pilots in North America. It has launched a hot dog program in 27 stores, where it is aiming to make the stores a destination for the category. Having delivered encouraging results to date, it plans to roll-out the program to 358 stores this year. In Canada, it has been testing a premium bakery program and aims to have it live in 300 stores by the end of the year.

Pushing ahead with Circle K brand roll-out

Central to these new programs is the continued roll-out of its global Circle K brand. It is currently being rolled out in Poland, the Baltic countries and Canada. Across North America and Europe, more than 3,000 stores are now using the Circle K brand. It is also rolling out its key global merchandise programs, including Simply Great Coffee and Polar Pop.

Stewart Samuel is program director with IGD, a global grocery and food industry research firm

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