Alimentation Couche-Tard has been expanding, saying that its convenience and fuel giant Circle K opened 188 stores over about 30 months and aims to open 750 more in the next five years.
The company, based in Laval near Montreal, outlined its growth strategy, called Core + More, at an analyst and investor day, following its unsuccessful takeover attempt of 7-Eleven. The presentation focused on growth and integrating 2,175 TotalEnergies retail sites in Germany and the Benelux bought in 2023. Couche-Tard said it's ahead of schedule integrating the locations into its portfolio.
"We are confident and delivering 750 new high-quality company-owned, company-operated sites to our network over the next five years," said Aaron Brooks, senior vice president of real estate and fuel customer, according to a transcript of the investor day presentation. "We have the capabilities, and we have the capacity to outperform on that 750, but we will remain disciplined."
Brooks said, "Given the promise we see with sites we're adding to our network, let's talk about our growth engine, where the U.S. is our primary target. We are continuing to take advantage of scale in this fragmented industry. Nearly 65% of convenience stores in the U.S. are owned by operators who have 10 or less locations."
Couche-Tard laid out its updated growth strategy about seven months after shelving its US$47 billion bid to buy the global 7-Eleven chain of convenience stores that would have greatly expanded Couche-Tard's presence in the U.S., Asia and elsewhere.
Couche-Tard operates close to 17,300 stores in 29 countries and territories and employs about 149,500 people. Its largest markets include the U.S., where it operates 7,308 stores, Canada, with 2,082 stores, and Europe and other regions, with 5,247 stores.
Fuel, nicotine, and beverages drive profits
During investor day, Couche-Tard also emphasized the importance of selling fuel, nicotine and beverages. These categories make up about 90% of sales and roughly 75% of gross profit across its stores, according to the Core + More report.
Couche-Tard says it sells 15.4 billion gallons of fuel annually and offers fuel at about 90% of its stores. The report highlights more than 110 million commercial fuel transactions a year and a logistics fleet of 575 trucks and 1,050 drivers.
Recent regulatory changes in North America and Europe, including Canada’s decision to drop mandatory EV sales targets, support the company’s view that gasoline demand will remain stable for several years. The report says Couche-Tard plans to invest in its fuel network through supply chain improvements, pricing systems and forecourt upgrades.
In its presentation, Couche-Tard also highlighted that it sells more than 1 million meals each week in the U.S. and identifies food as a growth engine tied to store design. The changes could have a significant impact on Circle K's real estate footprint, as modern foodservice requires more space, more equipment, and possibly seating or drive-thru capability, the company said.
The report shows that Couche-Tard holds a 22% share of the oral nicotine market in the U.S., which includes pouches, lozenges, and gums, and a 17% share of U.S. cigarette sales. Management told investors that nicotine demand continues to shift toward pouches and vape products and that the company expects to capture a larger share of that transition.
Meanwhile, in Europe, Couche-Tard said it just opened seven new Circle K locations in Ireland, bringing the familiar Circle K brand greater prominence in a market outside its core U.S. and European networks.
Founded in 1980 in Laval, Quebec, by Alain Bouchard. Couche-Tard has a market capitalization of roughly $75 billion and reported net earnings of about $3.6 billion in its most recent fiscal year. Alex Miller became chief executive in September 2024 after serving as chief operating officer.