This merger marks the creation of the largest business unit in Alimentation Couche-Tard’s global network in terms of number of stores, supports the company, and will allow us to make our customers’ lives even easier with aligned offers and promotions.
Divisions Quebec West
and Quebec East and Atlantic
thus become the business unit Eastern Canada
. It will bring together 1,200 corporate and affiliated stores in 5 provinces, mainly under the Couche-Tard and Circle K banners, and their 9,000 employees.
Store workers are not affected by this change, but administrative staff members have had to be assigned to new positions. Very little
layoffs would have taken place. The unit is led from Quebec by Pierre Peters.
The two units of Ontario and the Western provinces remain intact.
A change to the business model?
The decentralized management structure
of Couche-Tard is one of greatest strengths
recognized by the company, where each store is operated as a separate profit center
to better meet local demand.
We support our store managers with a strong, seasoned management team and adequate capital resources which we believe provide them with a significant competitive advantage.
can we read in the 2021 annual information form about decentralization.
Professor of strategy at Laval University’s Faculty of Business Administration, Yan Cimon, believes that this merger could pave the way for other operational efficiency measures at Couche-Tard
given the low profit margins in retail. Any operational gain that we can make is a gain that will contribute to the success of the business model
he said.
Mr. Cimon doubts, however, that Couche-Tard dark towards excessive centralization because, of course, you will have understood that local commerce is hyper-local and you have to keep this link
.
« It illustrates that Couche-Tard’s model must continue to evolve to remain relevant in the changing retail environment. »
The threat of electric cars
It is unclear whether the quest for greater operational efficiency by centralizing business units will become a new strategy for creating value at Couche-Tard. This decision does not affect the company’s decentralized business model
says the company.
At present, the retailer has about 40 business units on the planet. Last quarter, Canadian sales accounted for 13% of the company’s revenue. The merger of the divisions in the east of the country must therefore be put into perspective.
However, many are wondering how Couche-Tard will deal with the long-term risk posed by the arrival of electric cars. Not only will fuel demand be down, but so will store traffic.
The portfolio manager at Medici, Pierre-Olivier Langevin, first believes that the culture of autonomy
as promoted by founder Alain Bouchard will stay
and that acquisitions will continue to be Couche-Tard’s hobbyhorse with a view to growth.
years to change them all in the United States”,”text”:”If everyone bought electric vehicles tomorrow morning among the new vehicles sold, it would take 12 years to change them all in the United States”}}”>If everyone bought electric vehicles tomorrow morning among the new vehicles sold, it would take 12 years to change them all in the United States
he says before pointing out that the transition will be even longer in emerging markets such as Asia.
Local shops, even without fuel, will also always have their place in the future, according to him. He cites as an example the acquisition by Couche-Tard of a network of simple convenience stores in Hong Kong for nearly 360 million US dollars in 2020.
Langevin. We talked about dollar stores, restaurants.”,”text”:”We also see that leaders are starting to talk about incursions into other types of businesses, observes Mr. Langevin. We talked about dollar stores, restaurants.”}}”>We also see that the leaders are starting to talk about incursions into other types of companies, observes Mr. Langevin. We talked about dollar stores, restaurants.
In January 2021, Couche-Tard unsuccessfully tried to get its hands on French food giant Carrefour for over $25 billion.
Investors lost confidence in the company for a moment, but since its title on the Toronto Stock Exchange has regained nearly 30% of its value. Its market capitalization now exceeds $52 billion.
With the collaboration of Gérald Fillion
–
