Dive Brief:
- Alimentation Couche-Tard, parent of Circle K convenience stores, plans to build 500 new-to-industry (NTI) sites by fiscal 2028, Aaron Brooks, the retailer’s senior vice president of real estate, said during the company’s annual investor meeting Wednesday.
- These stores will emerge in both rural and suburban markets, Brooks said. While Couche-Tard expects to grow its NTI networks in Europe and Hong Kong as well, 90% of these locations will be built in North America, he noted.
- These goals underscore Couche-Tard’s new five-year strategic plan, which aims to achieve $10 billion in earnings before interest, taxes, depreciation and amortization (EBITDA) by 2028 through several organic and inorganic initiatives.
Dive Insight:
Each of the 500 NTI sites will emerge as one of two store prototypes: Couche-Tard's “standard” format, which is mainly used in suburban markets and features a 5,200-square-foot store as well as high speed diesel fuel; and its newer “core” prototype, which is used for rural locations and features a 3,900-square-foot store.
While Couche-Tard will be “blitzing” new markets for its more traditional suburban format, the company expressed excitement for its rural prototype during Wednesday’s meeting.
Although Couche-Tard’s development pipeline has only been about 15% rural stores to date, these locations have been some of the company’s highest-returning investments, offering confidence in these types of locations moving forward, Brooks said.
The smaller, rural store format is cheaper and takes less time to build than the suburban prototype, although both formats feature the same interior layout, he noted.
To date, Couche-Tard has about 1,400 rural stores, and the rate of building them is accelerating, Brooks said.
“The number of rural stores you will see built will more than double in the next 12-18 months,” Brooks said.
As part of the five-year plan, Couche-Tard will also focus on future-proofing both its rural and suburban stores by implementing more QSRs and a new high-speed diesel fuel offer. The company expects to achieve $500 million in incremental EBITDA with the new NTI sites by 2028, Brooks said during the meeting.
Laval, Quebec-based Couche-Tard operates more than 5,700 c-stores in the U.S. It is the second-largest c-store company in North America behind 7-Eleven.
