Brian Hannasch, who runs the Circle K chain of gas stations and convenience stores, is a food-obsessed guy. Eat it, but sell it.
Circle K’s parent company, Alimentation Couche-Tard Inc. , makes some of its gross profit from fuel, which isn’t an ideal scenario as the auto industry turns to electric vehicles. That’s why Hannasch, who has been CEO since 2014, is how to revive the company’s new produce business, which accounts for just 11% of sales at its 9,000 stores in North America.
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Couche-Tard was looking for a major acquisition, almost bought a French supermarket chain last year, but hasn’t made a major transaction in years. So, in the meantime, it’s expanding a marketing crusade into thousands of Circle K. outlets, food trucks and other advertising bureaucracy to trap consumers to check out a variety of hot sandwiches, pizzas, poultry and other dishes.
“As Covid has receded in most of our geographies, we see a lot more sampling and marketing around food,” Hannasch said in an interview. “We have many more features than Couche-Tard and Circle K had for consumers in the past. “
The longer-term goal is to increase new, ready-made food for 20% to 25% of sales in North America, in line with what the company is doing in its much smaller European division, Chief Financial Officer Claude Tessier said in an interview.
“The quality of the food in the retail establishments I visited in Europe was a bit more complex and complicated than what I can see here in North America,” said Martin Landry, an analyst at Stifel GMP. for tactics for its food supply in North America, he added.
Hannasch’s plan is to have universal production facilities at outlets that allow for regional tastes. Food is taken to outlets through suppliers and then prepared by employees, a more effective style than managing entire kitchens on site.
The concept comes from holiday station retail stores, a Minnesota-based chain that Couche-Tard bought in 2017, Landry said. North American retail outlets, according to a corporate filing last year.
To lose store space for energy-related tasks, Alimentation Couche-Tard is deploying 10,000 smart boxes in 7,000 locations.
Couche-Tard is making other investments in the food sector. In July, he joined Kroger Co. ‘s parent company. and Burger King, Restaurant Brands International Inc. , as part of a $100 million investment for Kitchen United Inc. The U. S. company operates “ghost kitchens,” food production centers that allow restaurants to optimize takeout orders.
Hannasch said the company was “interested” in the business style and said it was imaginable that Circle K could eventually use Kitchen United as a food and grocery distribution point. ecosystem or in conjunction with a Chick-Fil-A order or similar,” he said.
Diana Rosero-Pena, a research analyst at Bloomberg Intelligence, notes that food is “the most successful aspect of the store. “Over the next two years, Couche-Tard’s gross margin on new foods is expected to increase from 37 to 41 consistent with percent, he said.
Bloomberg. com
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