LAVAL, Quebec -- Alimentation Couche-Tard Inc. confirmed earlier this week that it will slow expansion in the United States this year by buying only 200 to 300 stores, but annual revenue will exceed $14 billion. We'll ease up from last year's torrid pace, but fill gaps in our regional coverage, continue to raise efficiency and add higher-value products along with 400 store makeovers, CEO Alain Bouchard said after the annual shareholders' meeting on Wednesday, according to a report by The Gazette.
CSP Daily News reported in mid-July that following its [image-nocss] third biggest fiscal year of store growth, the retailer planned to slow down its acquisition pace a little; however, Bouchard said at the time that he would still pull the trigger on a major dealor smaller dealsif the opportunities arise. The 200-300-store estimate is a number we can beat if the opportunities are there, Bouchard said during the July 17 conference call with investors. Our management is certainly ready for more stores in the majority of our divisions, excluding Florida. I think we can exceed that number if opportunity should occur.
At Wednesday's meeting, he said that although consolidation is speeding up in the fragmented U.S. convenience store industry and big acquisition targets are getting harder to find, there is still ample room for growth. The big oil companies are divesting more c-stores.
In Canada, growth will be mainly organic, since the industry is already heavily concentrated, he said. Couche-Tard is focused on booming Alberta, said the report, where staff shortages are being overcome with such noncash incentives as apartments and shared use of a car to tempt job-hunters from the East (see story in yesterday's CSP Daily News).
We're always looking and talking to people, and we've the financial muscle to handle a major deal costing $1 billion or so, he said. If a consumer recession does develop in the U.S., that might well give us the chance to buy at more reasonable prices.
According to the Gazette, Bouchard said Couche-Tard's U.S. platform can handle future competition from such giants as Britain's Tesco Plc with large stores planned for the U.S. West Coast, the Japanese-owned 7-Eleven group and potentially Wal-Mart Stores.
7-Eleven said it will invest $2.4 billion over the next four years to open 1,000 new stores in the U.S. and revamp its 6,000 existing units, the newspaper reported.
Bouchard assured shareholders that Couche-Tard's cash reserves are safely held in fully liquid and guaranteed investments, and that it has no nonbank or third-party asset-backed commercial paper, said the report. It plans to continue share buybacks, but any dividend increase will be up to the board.
Laval, Quebec-based Couche-Tard operates a network of 5,513 c-stores, 3,413 of which include motor fuel dispensing, located in nine large geographic markets, including six in the U.S. covering 29 states (under the Circle K banner) and three in Canada covering six provinces (under the Mac's and several other banners).
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