LAREDO, Texas -- Fomento Económico Mexicano SAB de CV (FEMSA), owner of the OXXO chain of convenience stores in Mexico, opened its second c-store in Texas, in downtown Laredo, on August 31.
FEMSA opened its first OXXO c-store in Eagle Pass, Texas, in May 2014, which at the time it called a "proof of concept" rather than a pilot.
Manuel Filizola, director of administration and finance for FEMSA, told El Norte that the second store is also a “concept store” to help the company better understand the U.S. market.
Juan Fonseca, FEMSA's head of investor relations, said on an earnings call in May 2015 that the company opened that store "as part of the conversations with the regulators and the government. It's not really a proper OXXO store, and … doesn't sell alcohol."
Monterrey, Mexico-based FEMSA, founded in 1890, is the largest independent Coca-Cola bottler in the world and an investor holding the second largest equity stake in brewer Heineken. OXXO operates approximately 12,400 c-stores in Mexico and Central America. It opened its first store, in Monterrey, in 1978.
FEMSA has said that it wants to invest approximately $850 million to open 900 convenience stores in Texas, but the move is contingent upon changes to alcoholic beverage laws in the state of Texas that prohibit retailers of alcohol from being owned by firms with ties to the liquor industry.
Both sides of the U.S.-Mexico border are seeing re-invigorated retail activity. In February 2014, Mexico City-based brewer Grupo Modelo sold its 880-unit Extra convenience-store chain in Mexico to Comercializadora Círculo CCK SA de CV, an independent franchisor for Mexico to which Alimentation Couche-Tard Inc. has granted a license for the rights to the Circle K brand in Mexico.
In August 2015, Couche-Tard signed an agreement with Círculo K to rebrand more than 700 of its existing Extra c-stores to the Circle K brand by August 2017.
“If you look at Southern California, Arizona, parts of Texas, we’re along the border, so it’s a natural extension to our markets,” Brian Hannasch, president and CEO of Couche-Tard said on the company’s earnings call this week. “And as the fuel market opens up in the coming years, as the government has committed to, we’ll continue to explore looking at Mexico more deeply.”
Meanwhile, the rebranding in Mexico was a precursor to Couche-Tad’s just-announced “brand harmonization” initiative for the 1,500-store Kangaroo Express chain it acquired from The Pantry. The company will convert those stores in the first half of 2016, and “we will be using the Circle K brand in the U.S. going forward as our convenience-store brand," Hannasch said.
Laval, Quebec-based Couche-Tard has nearly 8,000 convenience stores throughout North America.
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