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Alimentation Couche-Tard - the rapidly expanding North American c-store retailer - has announced the acquisition of Tabatout, a 30-strong Quebecois c-store chain, for the equivalent of $1.6 million (US). The acquisition will add retail sales the equivalent of $963,000 (US) and will be earnings accretive with immediate effect according to Couche-Tard. The stores are nearly all franchised and are situated in high-traffic locations such as office blocks, shopping malls and stations.

Another acquisition for Couche-Tard is hardly big news; this is one of the smallest of the eight deals that company has completed over the last two years, dwarfed by the acquisition of nearly 300 Dairy Mart units in the USA. The move is more notable from a tactical point of view, however, as it reinforces a strategic shift towards what the company calls non-traditional stores.

The business has hitherto been limited to the operation of traditional c-store units sited on petrol forecourts or in residential areas but the acquisition of Tabatout boosts Couche-Tard's initially tentative moves into non-traditional store operations. The appeal of these stores is made clear by Alain Bouchard, President and CEO, when he states that "the market niche of non-traditional stores represents an important growth avenue. these stores have higher-than-average sales per square foot and represent strong potential for our company".

The first non-traditional stores were opened by Couche-Tard earlier in fiscal 2002, with a unit located in Calgary airport and another sited in a bus terminal adjacent to the Longueuil metro station in Montreal. The opening of stores in high-footfall locations is nothing new: 7-Eleven has opened stores in American universities; Marks & Spencer (Simply Food), Ahold (AH to go) and Migros (avec) are all expanding their railway station formats and Tesco and Sainsbury's are progressing well in their opening programmes for city-centre convenience-orientated supermarkets. What Couche-Tard is reaffirming is that the very concept of convenience itself is changing, often at the behest of consumers. Gone are the days when a c-store was simply a small food store near a housing estate or at a petrol station.

Consumers are demanding food retail opportunities of an increasingly higher quality at an increasingly different number of locations. Only the more flexible and responsive retailers will exploit this opportunity to full effect, Couche-Tard is one of them.

Excerpted from M+M Planet Retail's Global Retail Bulletin.
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