TORONTO -- In what could shape up to a major battle in the history of the convenience store industry, 7-Eleven Inc. is pitting itself against Canada's c-store leader, Alimentation Couche-Tard Inc., with its plans for a major expansion effort in the Ontario marketplace. According to the Financial Post, 7-Eleven is set to announce this week at the International Council of Shopping Centers conference in Toronto that from 2012 to 2016, it will open up to 200 new corporate stores in Ontario, with a major focus on the Greater Toronto Area.
The move, worth hundreds of millions of dollars, would boost 7-Eleven's stable of stores by almost 50% in Canada, where it now has 467 locations. It has 43,500 stores worldwide, but only has a limited profile in the Toronto market, said the report.
The company said Toronto is a growth market, and it cites the city as being business friendly, with a diverse population and room to grow.
Ken Barnes, the regional development director for 7-Eleven, said that he believes there are not enough convenience stores in the Toronto market. "What is driving our growth plan is we believe we are incredibly under-stored in a vibrant area of Canada," he told the newspaper. "There are a lot of people here and not nearly enough 7-Elevens."
Barnes was already out scouting sites with a plan to have at least a dozen deals done by year-end, the report added.
The company anticipates using store models that will have enough flexibility to challenge operators in Toronto's downtown core, but also "gas bars" in the suburbs where 7-Eleven will sell fuel.
"They have some great corners. You look at the oil companies, the dynamic quality of their dirt, and they are very viable," said Barnes.
Laval, Quebec-based Couche-Tard has 565 corporate stores and 191 affiliated stores in its Central Region, according to its website; it has approximately 2,000 corporate and affiliate outlets across Canada.
"In convenience, you have Mac's. But our plan is flexible. We will go into strip centers. [We'll go] in an office tower or [we'll] build out with a gas offering," said Barnes, adding that Toronto's booming condominium market is pushing the need for more c-stores. He said the chain is willing to locate right in some of those new condominium buildings, if he can get the right deal.
U.S. merchants have long seen Canada as an attractive market, said the report. Retail real-estate experts note that the United States has 23 square feet of shopping space per capita to Canada's 14 square feet per capita.
"Retailers seem to think Canada is an attractive opportunity because it has held up much better [than the U.S.] since the 2009 downturn--better economy, better employment--and we are seeing retailers capitalizing on that opportunity," Peter Sklar, a retailing analyst at BMO Capital Markets, told the Financial Times.
Avi Behar, chief executive of Behar Group Realty Inc., which has been hired to handle the Ontario rollout of 7-Eleven, said the company has had more of a scattered approach to the Toronto market, but he expects that to change quickly. "They are looking all over the place," he told the paper.
Laval, Quebec-based Couche-Tard's retail network is comprised of 5,795 c-stores, 4,128 of which include motor fuel dispensing, operated by 13 business units, including nine in the United States covering 43 states and the District of Columbia (primarily under the Circle K banner), and four in Canada covering all 10 provinces (mainly under the Couche-Tard and Mac's banners).
Based in Dallas, 7-Eleven operates, franchises or licenses more than 8,800 7-Eleven stores in North America. Globally, there are approximately 43,300 7-Eleven stores in 16 countries. During 2010, 7-Eleven stores worldwide generated total sales close to $63 billion. Tokyo-based Seven & i Holdings Co., is the parent company of 7-Eleven Inc.
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