We review how Couche-Tard, which operates mainly under the Circle K banner globally, performed in the first quarter performance and the impact of COVID-19 across its development plans.
Q1 headline numbers
- Total merchandise and service revenues increased 7.0% to $3.9bn
- Same-store merchandise revenues up 19.9% in Canada, 7.7% in the US and 3.4% in Europe
- Same-store road transportation fuel volume fell 25.6% in Canada, 21.2% in the US and 12.4% in Europe
- Net earnings up 44.2% to $777.1m
Proximity driving store sales
The COVID-19 pandemic had a significant impact on the retailer’s first quarter performance. Although traffic was down as customers consolidated their trips, an increase in the average basket size more than offset this. The retailer also adapted its offer to meet new demands as customers relied on the proximity of its locations for their needs during the crisis. Marketing and loyalty efforts are focused on retaining new customers, while it flexes its product offer to include more health and hygiene products and larger pack sizes.
Driving bigger baskets with new foodservice programme
Despite the challenges, the company pushed ahead with its foodservice ‘Fresh Food Fast’ initiative, one of the biggest programmes undertaken for several years. Just under 900 stores feature the new offer, with the business remaining on-track to extend the roll-out to 1,500 stores by October. Sales in the converted stores outpace those not converted, with the programme helping to drive more items into the basket and having a halo effect across the wider store offer.
Shaping the convenience store of the future
The pandemic has also seen Couche-Tard accelerate several of its tech-led initiatives. It has rolled-out responsive fuel pricing to over 2,400 locations, while 800 stores feature localised pricing. Over 1,000 stores offer home delivery while a further 1,000 sites offer curbside or store pickup. The retailer has also deployed frictionless payment options to additional locations, including licence plate recognition in Norway, along with its mobile app and pre-pay options in other markets. Recently it announced a partnership with Standard Cognition to pilot its autonomous checkout solution, highlighting the shift in approach as Couche-Tard aims to take a leadership role in shaping the convenience store of the future.
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