Alimentation Couche-Tard continues to make headlines for its push to acquire Seven & i Holdings, the owner of 7-Eleven. But amid its pursuit of the world’s largest c-store retailer, Couche-Tard — parent of Circle K convenience stores — has quietly built its foodservice capabilities to the point where it’s competing with QSRs, President and CEO Alex Miller said during the company’s second-quarter earnings call on Tuesday.
Much of Couche-Tard’s foodservice effort in recent years has been centered on developing its Fresh Food, Fast program, which was available in nearly 5,800 Circle K locations globally as of this summer. That program, which debuted in 2020, features hot sandwiches and burgers, cold deli subs and wraps, pizza, hot snacks, baked goods and roller-grill dogs.
But Couche-Tard took its focus on food a step further when it launched its value deal menu last month. The menu — a permanent fixture to the Fresh Food, Fast program at all Circle K sites across the U.S. — includes $3, $4 and $5 meal options, and was specifically made to target price-conscious consumers, the company said at the time.
Each meal includes a roller grill item, breakfast sandwich or pizza slices alongside a side and a packaged beverage. Less than two months into launch, Couche-Tard is selling over 300,000 of these value meals each week — an encouraging result, Miller said.
Many major restaurant chains have launched similar value menus and items in 2024. McDonald’s and KFC both launched $5 meals this year, while companies like Sonic and Del Taco have menu items for as low as $2. Other c-store chains that have debuted value meals include Wawa, 7-Eleven, EG America and GPM Investments.
Miller said that Couche-Tard has specific advantages that restaurants don’t when it comes to these types of meals.
“While meal deals have become common in QSRs, we can differentiate ourselves through partnerships with our suppliers by offering a variety of options, including energy drinks and chips, that are not available at QSRs,” Miller said.
Couche-Tard is also hoping its new value meals boost same-store merchandise sales, which have dropped for the past four quarters in a row. In its latest quarter, same-store merchandise revenues dropped by 1.6% in the U.S., by 1.5% in Europe and other regions, and by 2.3% in Canada.
For the second straight quarter, Couche-Tard pinned this decrease on “constraints on discretionary spending due to challenging economic conditions for low income consumers.”
While those economic headwinds persist across the c-store industry — competitors such as 7-Eleven and Parkland are feeling them as well — Couche-Tard is counting on its new meal deals and broader foodservice efforts to give its same-store sales a boost, Miller said.
“They're growing exponentially week on week, and we believe we've just scratched the surface,” he said. “The margin profile of those meal deals are more attractive than what we were doing over the summer.”
