LAVAL, Quebec — Electronic cigarettes and other “alternative” tobacco products were strong sellers for Alimentation Couche-Tard and its Circle K chain in the United States, while a digital upselling screen at the register has helped boost tobacco sales overall, officials said during the company’s July 10 fourth-quarter and fiscal year-end earnings call.
Alternative tobacco products continued to be a “strong performer,” positively affecting Couche-Tard’s overall same-store sales result, with minimal impact from San Francisco-based Juul Labs pulling its flavored-vaping pods, said Brian Hannasch, president, CEO and director of Laval, Quebec-based Couche-Tard. Last fall, the U.S. Food and Drug Administration persuaded San Francisco-based Juul to pull retail sales of its creme, cucumber, fruit and mango flavored pods as part of the agency’s efforts to stop minors from using e-cigarettes.
About the alternative-tobacco subcategory, Hannasch said, “We’re seeing a variety of innovation in this space both in terms of new products and improvements, and our backbar layout [is] bringing more visibility to these products.”
In the United States, the company saw an overall increase in same-store merchandise revenue of 3.4% compared with the same quarter last year, with “good performance” in all of Circle K’s business units. The chain operates through regional business units, creating a collection of divisions that operate with a degree of autonomy.
Meanwhile, Hannasch said tobacco was also a key category for its Lift digital upsell platform, in which the customer sees a screen at the cashier that informs him or her about store specials. The content put before customers is tied to Circle K’s loyalty program. Hannasch said the digital program contributes to growing its market basket and delivers engaging content.
Couche-Tard has expanded the Lift program to more than 5,700 U.S. sites, and it has more than 7 million unique loyalty members. Speaking about two of its relatively recent acquisitions—CST Brands and Holiday Stationstores—Hannasch said half of the Holiday stores and all the CST sites have Lift.
“Our tactical loyalty clubs have grown beyond our adult tobacco consumers in the tobacco club to include beverage and snacking clubs,” Hannasch said. “We’re building a very large database of loyal store visitors to engage with in the future as we continue to make our customers’ lives a bit easier.”
Overall, Hannasch said the company had a “fantastic” fiscal 2019, with a “record bottom line and impressive cash flows,” and it surpassed its target for creating synergies within its CST and Holiday acquisitions.
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