On the acquisition front, Alimentation Couche-Tard (TSX:ATD.B) recently took an all-important and exciting step of entering the Asian market with Couche-Tard’s purchase of Circle K Hong Kong, a network of more than 370 stores in Hong Kong and Macao that had been operated by one of the company’s licensees.
Leveraging Couche-Tard’s presence
The business now appears to have a platform in place from which Couche-Tard appears ready to grow in the region. This draws many similarities with the company’s entry into the United States 20 years ago when it acquired Bigfoot. The Bigfoot acquisition leveraged Couche-Tard’s presence to purchase Circle K a short time later. In the United States market, Couche-Tard took advantage of the company’s scale to densify some of the company’s markets with the acquisition of three fill-in regional networks.
Responsible retailing of age-restricted products
In addition, Couche-Tard appears to play the role of a responsible retailer of age-restricted products and has spent decades building the reputation and necessary capabilities to lead in that area. These capabilities should extend well to the sale of cannabis and related products, and Couche-Tard has been dedicating resources to better understand what it will need to succeed in that arena.
In that regard, over the past year, Couche-Tard has increased the company’s investment in Fire & Flower, and now possesses a minority stake of approximately 20.0% in the company with a path to control should it choose to do so.
Navigating regulatory findings
Further, Couche-Tard also now has two Fire & Flower stores co-located next to the company’s own Circle K stores in Western Canada. Couche-Tard appears to continue to learn from these investments and explores how it will expand these findings to the U.S. as regulations develop in that country.
Refining new store builds
Furthermore, Couche-Tard is continually refining the company’s new store builds, and this year pushed forward with the company’s new larger-format horizon model with enhanced branding and improved layout to improve the customer’s journey. Couche-Tard has also focused on the company’s urban store strategy of identifying more sites, some of which emerged from the pandemic. Couche-Tard plans to add these stores to the company’s portfolio as part of a network growth strategy.
Significant strides in inclusion and sustainability
Over the course of the year, Couche-Tard also appears to have made significant strides in employee engagement, diversity and inclusion, and sustainability as a lens to evaluate the company’s business. While the year was clouded by the pandemic, Couche-Tard appears to have worked hard to make safety the company’s number one priority and to be part of the medical solutions in the company’s communities.
At the same time, Couche-Tard has pushed forward programs and innovations that make it easier for employees to serve the company’s customers and train for future success.
Recognition and driving engagement
Amidst the challenges of this year, Couche-Tard appears to have hit a major milestone with the company’s highest participation ever, over 94%, in the annual employee engagement survey. Across the board, Couche-Tard’s team members are recognizing the company’s efforts to drive engagement.