Alimentation Couche-Tard’s Circle K convenience-store chain is opening another nonfuel urban location in Chicago.
The new store is under construction at the corner of Belmont Avenue and California Avenue on the city's north side. Another future store is listed online at 733 S. Dearborn St. in Chicago.
Circle K said a year ago it was opening 10 urban markets in Chicago as it saw an opportunity in vacant locations due to what it called “the evolution” in the real estate market in the Windy City from vacancies due to COVID-19.
“We saw a unique opportunity in that market to secure some space in some great locations given the evolution of the downtown-area real estate market,” said Chris Barnes, director of communications for Laval, Quebec-based Couche-Tard.
Post-COVID Opportunity
Due to the pandemic, a stay-at-home order in 2020 and other regulations affecting restaurants into 2022, many Chicago retail locations were vacant during COVID-19, and this presented an opportunity for Circle K. In December 2021, Cook County, which includes Chicago, required consumers to show proof of having had the COVID-19 vaccine to enter indoor dining, entertainment and recreation facilities. This mandate, which was officially lifted Feb. 28, 2022, allowed many restaurants that had closed their doors to open again.
Signs on downtown streets encouraged people to "Slow the spread of COVID-19. Stay home if you can."
Two of the downtown sites where Circle K has opened stores previously were occupied by Pret a Manger, the Chicago Sun-Times reported.
Besides the Belmont location opening soon, Circle K has opened nonfuel locations in urban Chicago neighborhoods at 3601 N. Western Ave., 235 W. Adams St., 36 W. Ohio St., 850 N. State St., 190 W. Madison, 3180 N. Broadway Ave., 200 N. LaSalle St.
At a time when Chicago offices were about 40% occupied, according to security firm Kastle Systems, Circle K secured leases at several other Chicago locations where Circle K stores haven’t opened yet.
While the pandemic’s effects on retailers varied from one area to another in the United States, many Chicago storefronts went from “closed for COVID” to “vacant,” including restaurants, banks and other retail locations.
This presented an opportunity for Couche-Tard to enter Chicago’s urban neighborhoods, including the downtown area called the Loop.
- Alimentation Couche-Tard is No. 2 on CSP’s 2023 Top 202 list of convenience-store chains by store count.
Several new Chicago Circle K stores are on prominent corners, including one on the corner of Adams Street and Franklin Avenue in the Loop, and another at the corner of Belmont Avenue and Broadway. Both are areas with heavy foot traffic.
A third is located kitty-corner from Chicago’s Lane Tech High School.
Smaller Footprint
“These are smaller footprints, and as such, our offerings and programs there are tailored to meet the needs of walk-in customers who live, shop and work in that area. We’re excited to see how these sites do over time,” Barnes said.
Circle K also has an urban store in Boston near the convention center and some in Montreal, Hong Kong and Dublin, he said. Besides these, Circle K has several nonfuel locations in U.S. strip malls and shopping centers, he said.
Couche-Tard has about 14,468 sites in 25 countries and territories globally, including 2,000 under licensing agreements. About 3,500 locations don’t offer transportation fuel, according to the company’s financial documents.
While transportation fuel pulls in about 47.5 cents of profit per gallon sold, generating a total gross profit of $6 billion in fiscal 2023, up about $779.5 million from 2022, the convenience stores’ margins are higher at some locations. The company’s merchandise and service gross profit was $5.9 billion, up $277.3 million from 2022, while gross margin rose 0.1% to 33.8% in the United States.
Couche-Tard’s focus remains on standalone sites, Barnes said. “In these locations, we can provide the full Circle K experience, including our Fresh Food Fast, beverage programs and full complement of traditional convenience merchandise as well as our fuel, carwash and, increasingly, EV charging services.”
Polar Pop
At three nonfuel urban markets CSP visited, beverages and snacks were selling well, according to employees who work there. The company competes with 7-Eleven on fountain drinks, offering an 89-cent Polar Pop beverage, compared with the 99-cent Big Gulp.
The stores are equipped with Smart Checkout self-checkouts. While an employee at a Loop location said they don’t always work on the first try, at the Broadway location, the devices are the go-to place to check out. The Smart Checkout instructs consumers to place several items on the tray separated and pay with a credit card, Apple Pay or another payment form. Two employees were stationed behind the counter at the Loop store when CSP visited.
The Adams Street and Broadway Avenue locations sell wine and beer, while the Lane Tech location wasn’t selling alcohol when CSP visited last fall.
Customers going to the Adams Street location enter the glass doors for a view of the entire store, walk past an Illinois Lottery machine and down a few steps to shop its aisles. The first merchandise display they encounter has bakery items from Hostess, Nabisco cookies and Pop Tarts, Lay’s chips, gum and mints. A wine cooler takes the form of an endcap, while other wines at room temperature also are prominently located. Candy items are well stocked in two full aisles in the center of the store, as well as near the checkouts.
A grab-and-go cooler case at the Broadway store stocks burgers, breakfast sandwiches, Lunchables, dill pickles and the like, while an overstuffed Grupo Bimbo display next to the fountain drink bar offers doughnuts, muffins and Pastilas. A fresh bakery case offers three cookies for $2.50 and $1 doughnuts. Frozen pizza, ice cream and ice are stock in three cooler doors.
A coffee bar advertises Circle K’s $9.99 per month Sip N Save deal, offering a coffee or fountain drink per day. On the other end of the store, shelves of pantry items include Milk-Bone dog biscuits, paper goods, detergents and cleaning supplies. The next section offers canned soups and bottled condiments. Cases of water are stacked near the door, near a display of two-liter sodas.
Tucked into the small location is an ice cream cooler offering Nestle Drumsticks and Tollhouse ice cream sandwiches and Haagen-Dazs bars. A rack of gift cards sits next to an electronics display with phone holders, cables and cords on one side and sunglasses on another. The stores are equipped with ATMs.