March 1, 2012
Bouchard: recession catching up with Eastern Canada
Country’s largest C-Store chain sees sluggish demand
One of the convenience store industry’s most connected players provided a great first hand glimpse into industry-wide conditions recently, noting that while things are picking up south of the border, that’s not the case here.
“The US market is opening up,” said Alain Bouchard, president and chief executive officer of Alimentation Couche-Tard, Canada’s largest convenience store operator. “However the recession seems to be catching up with us in Canada. Things are slowing, particularly in Quebec, the Maritimes and parts of Ontario.” Bouchard made the comments following a rare public appearance, at a meeting of the Quebec Association of MBAs, his first such outing in three years.
The comments add clarity to remarks made shortly after the release of the company’s second quarter results. “Consumers continue to be very price sensitive, forcing us to maintain promotions on certain products to protect traffic,” Bouchard said at the time. “Of course this puts pressure on our margin percentage. However growth of same store merchandise sales more than compensated for the decrease.”
Bouchard centered his presentation to the MBAs on lessons learned during the company’s phenomenal growth phase, which he led, which started with the founding of its first store in 1980. Much of that progress stemmed from the company’s ability to acquire and integrate a slew of competing banners, ranging from Mac’s and La Maisonnée to Perrette and Mike’s Mart.
Acquisitions continue to be a core part of Couche-Tard’s strategy. Between the beginning its fiscal 2012 year (which started on April 1rst) to the end of its second quarter, the company signed agreements to buy 201 company-operated and 261 independent outlets and deals to supply motor fuel to 63 outlets.
Today Couche-Tard, operates more than 5,795 convenience stores, including 2,000 in Canada and continues to generate solid financial results, including an 8.8 percent increase in diluted earnings per share, which the company characterizes as “positive” given the current economic circumstances. Couche-Tard also expects a positive second half of the year, as the results of the newly acquired outlets are integrated into existing operations.
Couche-Tard has been under the gun in recent weeks in its home Quebec base, due to media attention surrounding conflicts with local unions, which have been making a push to sign up employees. The latest to be accredited by Quebec’s Labour Relations Board, a convenience store in Pierrefonds, on Montreal’s West Island, is the fifth to receive that distinction. The latest controversy stems from the closing of two of those five outlets, coupled with the opening of another store, under the Provi-Soir banner, just blocks away from one of the shuttered locales.
That said, Bouchard’s appearance before the MBAs, who were hungering to hear his account of how he engineered Couche Tard’s remarkable growth, provided an opportunity put a positive spin on the company. Judging from the reaction, it appears to have worked. “I have only had the time to talk about a few of our moves,” he said to an appreciative audience. “If you want to know more you’ll have to invite me back again.”
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