Regarding CST Brands, Hannasch said, “The Couche-Tard integration team has done a remarkable job both in the preparation and closing phase. And we are now dedicating our efforts to the transition—a key phase in any acquisition process for us. We've very experienced management team and leaders ready to make this happen. Job offers and acceptances have been finalized and work streams in each of the main parts of the business have been clearly identified and staffed to get ready to execute.”
Couche-Tard has appointed Darrell Davis to spearhead the integration of San Antonio-based CST Brands' 1,300 c-stores. “He is the same gentleman that led the integration of The Pantry,” said Hannasch, “so he has got real-life, hands-on experience in integrating large enterprises into the Couche-Tard family.”
After focusing on securing the people at CST Brands and CrossAmerica, the strategy is to “divide the business up in the work stream,” he said. “That is focused on first of all capturing the synergies, documenting and identifying best practices and then overall alignment and integration of the business, whether that be on the accounting side, the finance side, tax side, etc. So it is a very detailed work plan.”
But Couche-Tard has not forgotten the consumer experience.
“Taking what I think are some relatively weak trends that CST had over the last two years—certainly some of that driven by the slowdown in sales in Texas—but we are focused on reversing that by introducing some of the best practices from Circle K, some of our programs that are the foundation of our brands and again trying to reverse the traffic that we've seen there.”
Couche-Tard hopes to make its Simply Great Coffee known to more of its customers. The offering is now available in more than 2,700 stores globally and has been a success in Europe, Hannasch said.
“The next year will be dedicated to increasing customer awareness and trial here in North America,” he said. “We'll continue to invest in other key categories also, such as cold beverage and fresh bakery, which have proven sales results in several markets that they have been integrated and rolled out into.”
In the stores, “the next year we'll be focused on improving top line and then specifically rolling out core Circle K programs like Polar Pop, to optimize their joint private-label programs, and preparing for full rebranding to Circle K,” he said. “In the CST network, the rebranding this year will focus on markets where both brands are present today.”