CHICAGO — Circle K is focusing on food as one of the major ways it is transforming itself from a traditional convenience store chain to a destination retailer, according to Kevin Lewis, chief marketing officer for Laval, Quebec-based Alimentation Couche-Tard Inc.’s Circle K, who spoke with CSP Vice President of Retailer Relations Mitch Morrison in an Outlook Leadership Community Talks From the Top interview.
“It's no secret that Circle K has been behind, especially in North America, on the food side, despite some incredible capabilities in our European organization,” Lewis said. But despite Couche-Tard’s acquisition of c-store foodservice success story Holiday, “that hasn't been a strength of our portfolio here in North America.”
Nevertheless, the company recently launched its Fresh Food Fast program essentially “as an app store,” said Lewis. “a standardized hardware platform [into which] we can put a lot of different software—different food types, different meal occasions.”
Couche-Tard’s foodservice program is built around three pillars: good food, done in a way that's operationally easy and profitable and with the ability to be customized at a store level or store cluster level. It has “a standardized platform that really allows us to personalize and customize the offer almost at the flip of the switch, without having to retrain the tens of thousands of people around the country to make it happen,” he said.
But customization and standardization are contradictory, he acknowledged. How does a retailer create a standardized model that allows for customization, for “standardized localization”?
“One of the things that simultaneously, I think, is the most incredible and wonderful and the most frustrating, is our decentralized model here at Couche-Tard,” said Lewis. “What happens, happens in our individual business units. Candidly, I and my colleagues are the least important folks in this business. Our folks who at the end of the day are responsible and accountable for our [profits] and delivering that customer experience locally, are really the folks we're all here to support. So the question is really, when do we decide to actually violate in some ways what has made us successful?”
Lewis said that Couche-Tard has learned that “there are times when holding hands across business units simply allows us to do things that we couldn't do if we did them individually, or where the consumer experience is so dependent on holding hands, that we'd be silly to fragment.”
He cites loyalty as an example. “You wouldn't have 20 different loyalty programs distributed across the country, different by geography,” he said.
But with a common Circle K brand, the company wants to ensure that what it represents, that the promise is consistent. “Over the last few years, we've started to connect the dots on stuff that touches the customer, whether it's our new coffee program, whether it's food, our data and analytics capabilities, but also our fuel brand, our innovation pipeline, places where scale matters or capability is scarce,” said Lewis. “Those are the places that we really start to hold hands. And the model again is our local folks are the ones on the front lines. The default setting is that they're going to do it. And if they need help, they'll ask.”
He added that local stores don’t have to use what corporate develops. “If we have a crappy coffee program, or if the food program isn't working as it should, they don't have to participate. We have a pull rather than push model.” He describes it as a “healthy tension, the check and balance.”
“What needs to be standardized are the core principles underneath the program, the fresh, the convenient, the value. Those pieces have to be common,” said Lewis. “If at the end of the day, consumers here in Charlotte want barbecue, and our consumers in Texas want tacos and in California they want organic, great. We don't see standardization as the goal. We see the standardization of the platform as the goal.”
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Laval, Quebec-based Couche-Tard—which isNo. 2 on CSP’s 2020 Top 202 ranking of U.S. c-store chains by size—consists of a network of approximately 9,275 c-stores in North America, primarily under the Circle K brand. It also operates a retail network in Scandinavia, Ireland, Poland, the Baltics and Russia that includes more than 2,700 stores and unmanned automated fuel stations. And under licensing agreements, close to 2,350 stores operate under the Circle K banner in 15 other countries and territories (Cambodia, Egypt, Guam, Guatemala, Honduras, Hong Kong, Indonesia, Jamaica, Macau, Mexico, Mongolia, New Zealand, Saudi Arabia, the United Arab Emirates and Vietnam), which brings Couche-Tard’s worldwide total network to more than 14,300 stores.