LAVAL, Quebec -- Earlier this summer, Alimentation Couche-Tard Inc. celebrated the first anniversary of its CST Brands acquisition. During that year, the company has been busily rebranding thousands of stores in Europe and North America under the Circle K banner. As a result of the transition, the Couche-Tard has improved sales trends and realized impressive synergies, said CEO and President Brian Hannasch in a recent earnings call. “In the U.S., we saw an increase in same-store merchandise revenue of 4.2%, [and] it was good performance in the majority of the U.S. business units, including stronger sales at the CST sites in the U.S.” For some of that traffic, Couche-Tard has foodservice to thank. In fact, the top three growth drivers are food, beverages and car wash, the company said.
Check out how the convenience giant is boosting foodservice sales in the U.S. and Canada.
In fiscal first-quarter 2019, Couche-Tard expanded its pilot test of new beverage offers in the U.S. American consumers did not seem to embrace the brand’s Simply Great Coffee quite like Europe and Canada has, so the company tested seasonal blends and bean-to-cup equipment. “Early results are encouraging, and we believe if we reach that conclusion that we've got a winner, [then] we feel we can scale this very quickly,” Hannasch said.
On the bakery side, the company also rolled out a bakery kolache to the majority of its Texas units.
Focus on the fountain
With Circle K’s Polar Pop rolled out to most U.S. CST sites, the company is seeing a lift in traffic, Hannasch said. To create more buzz around the beverage, Couche Tard invested in fewer but splashier campaigns. In the Phoenix, Dallas and Detroit markets, Circle K held meet and greets with IndyCar driver Marco Andretti, promoting Polar Pop and Oberto Beef Jerky at the events.
This summer, the chain launched its first multinational Polar Pop campaign, with its “Your Cup. Your Rules” promotion. The company called on fans and social-media influencers to share how they personalize the drink to beat the heat with the hashtag #DontBeThirsty. Circle K team members also participated in an internal video contest to show their Polar Pop pride.
Photograph courtesy of @danny_berk
The little things
Hannasch also attributes growth to some operational fine-tuning. “It's improvements, little improvements in operations; it's resets,” he said. “It's improving placement of impulse products, revising assortments to make sure we've got high-velocity attractive items.”
Laval, Quebec-based Couche-Tard's retail network includes 9,978 c-stores in North America in 48 U.S. states and all 10 provinces in Canada, primarily under the Circle K and Holiday brands. It ranked No. 2 in CSP's 2018 Top 202 list of the largest c-store chains in the United States.
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