Bloomberg has a story about how Circle K owner Alimentation Couche-Tard is developing a series of tactics designed to serve a core strategy - growing its food sales to represent between 20 and 25 percent of sales.
The impetus comes from a recognition that the company is too dependent on fuel sales and profits at a time when electric vehicles are becoming more available and prevalent on US roads.
One possibility, Bloomberg writes, is an acquisition: "it came close to buying a French grocery chain last year," but didn't, and hasn't made a major food-centric purchase in years.
"So in the meantime, it’s expanding a marketing push in thousands of Circle K outlets, using food trucks and other forms of advertising to spur consumers to try a lineup of hot sandwiches, pizza, chicken and other meals," Bloomberg writes, quoting Brian Hannasch, the company's president-CEO, as saying that "as Covid has backed off in most of our geographies, you will see a lot more sampling and marketing around food … We have a lot more options than what Couche-Tard and Circle K of the past had for customers."
"Hannasch’s plan is to have universal production facilities in stores that allow for regional tastes. Food is brought to stores by suppliers and is then prepared and made ready-to-eat by employees, a model that’s more efficient that running full kitchens on-site … To free up in-store staff for food-related tasks, Alimentation Couche-Tard is rolling out 10,000 smart checkouts in 7,000 locations.
"Couche-Tard is making other investments in the food business. In July, it joined Kroger Co. and Burger King parent Restaurant Brands International Inc. in a US$100 million funding round for Kitchen United Inc. The US firm operates so-called 'ghost kitchens,' food production hubs that allow restaurants to streamline takeout orders.
"Hannasch said the company is “intrigued” by the business model and said it’s possible Circle K could eventually use Kitchen United as a distribution point for food and grocery items."
- KC's View:
I've long believed that c-stores - especially a chain like Circle K, with its enormous geographic footprint - are ideally positioned to redefine convenience retailing and provide stronger competition up and down the supply chain. By combining concepts like dark stores and ghost kitchens with new delivery technologies, and investing in more and better food to differentiate themselves, they can actually enlarge their relevance to a broader customer base, and do so without alienating their core.