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Shopping in Europe


While news of Couche-Tard making an acquisition shouldn’t be much of a surprise, I was taken off-guard by its recent announcement of its plans to buy Norwegian-based Statoil Fuel & Retail.

As one of the world’s largest convenience store operators, with almost 6,000 stores and second only to 7-Eleven in North America, Couche-Tard now has more global ambitions in mind.

This is a significant change in strategy. The company  has previously concentrated on buying up targets in the U.S. to boost its presence in southern, mid-western, mid-Atlantic and western states,

This is the largest proposed takeover that Couche-Tard has made to date. With over 2,300 stores, Statoil occupies market leadership positions in Norway, Sweden, Denmark, Latvia and Estonia, while it also has a strong presence in Lithuania and Poland.

Couche-Tard’s rationale for many of its acquisitions has been to unlock value through replicating its successful store-focused approach to under performing gas-station based convenience retailers and driving synergies.

With Statoil, it’s a bit different.

In addition to the benefits of economies of scale by combining these large companies,  it also provides Couche-Tard with an expanded geographic footprint,  reducing the retailer’s dependency on the North American market and economy, diversification into new product categories and a European platform for potential future expansion.

To an extent, the Statoil business will be run on very much an independent basis, retaining the existing management team, and continuing the strategy of focus on the high growth markets of Central and Eastern Europe.

Couche-Tard has also spoken about utilising its experience in North America, where it has enhanced its focus on fresh foods and food-to-go,  to develop Statoil’s customer proposition.

Couche-Tard’s strategy over recent years has very much been on innovation and differentiation, upgrading its stores and developing its range of private and exclusive brands.  These are also key elements which the retailer is likely to seek to leverage across the combined networks.

This exchange of best practice can work both ways, and it will be interesting to see how the retailer uses the learning opportunities from Europe back to its core markets.

While the acquisition may appear ambitious, Couche-Tard certainly has an unrivalled track record of successfully integrating its various businesses.

The acquisition of Circle K almost a decade ago provides some interesting comparables.  The deal, at the time, doubled the number of stores which the retailer operated and provided the platform for continued expansion in the U.S.

And this is what makes the proposed Statoil acquisition interesting.

It also provides a platform for further European acquisitions.  The major oil companies continue to shift the focus of their operations on to their core gas retailing activities in Europe, divesting their store operations to more convenience focused specialists.

This is a space that retailers in Europe are increasingly seeking to grab a share of, given the relatively strong growth that is forecast for the sector.

As a global powerhouse in convenience retailing, Couche-Tard, is well positioned to capitalise on this and lead further industry consolidation.

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