Couche-Tard looks to Asia for latest expansion

After gobbling up conveniencestore chains in North America and Europe, Alimentation CoucheTard Inc. has its eyes on Asia, where the company is seeking to enter the Thai and Indian markets.

Co-founder and Chairman Alain Bouchard told shareholders that the Montreal-based company is crafting a strategy for the two countries, while also looking for ways to increase its presence in southern China, where CoucheTard has a foothold through licensing agreements but doesn’t operate stores.

“We’ve had concrete conversations with people, with management teams, with companies,” chief executive Brian Hannasch said in an interview after the annual meeting in Laval, outside of Montreal. “There’s a lot of work to do to really understand the cultures, the ability to have a level playing field, to compete fairly.”

Couche-Tard, which started with one store in a Montreal suburb in 1980, will soon have a footprint in 48 U.S. states. Bouchard has gradually expanded the company, first in its home market, then to the rest of Canada, before entering the U.S. in 2001 and Europe in 2012. Some investors are wondering what will drive Couche-Tard’s growth given sluggish demand in parts of the U.S. and threats to gasoline consumption posed by the rise of electric and more fuel-efficient vehicles.

The shares have fallen 0.7 per cent this year to $60.45, after more than doubling since the start of 2014.

Couche-Tard — which is French for night owl — has a no-frills reputation, with top management known for visiting scores of stores to spot weaknesses before making acquisitions. The company is digesting a string of purchases, including CST Brands, which gave it a stronghold in Texas but also exposed it to hurricane Harvey last month.

As of July 23, the company had almost 13,500 locations in North America and Europe, most of which combine a store and gas station. It also had about 1,700 Circle K stores under licensing agreements from Vietnam to Costa Rica.

Couche-Tard may now pause its shopping spree to lower debt, but Hannasch said acquisitions are “part of our DNA,” with lots of opportunity for big deals in Europe and some in North America. Mexico was also brought up with investors.