Fresh vs frozen: Circle K, On The Run parents face off in convenience store food fight
BNN Bloomberg
Two of Canada’s largest convenience store operators are taking opposing strategies when it comes to expanding their food services.
Two of Canada’s largest convenience store operators are taking opposing strategies when it comes to expanding their food services.
Parkland Corp., which owns hundreds of On The Run, Ultramar and Husky gas station locations across the country, made a $322 million bet on frozen foods earlier this week when it agreed to acquire M&M Food Market. Alimentation Couche-Tard, meanwhile, has embraced a concept it calls “Fresh Food, Fast” for its network of Circle K stores.
Couche-Tard “does not need to respond at all” to Parkland’s acquisition, one analyst that covers the Montreal-based company’s stock who asked not to be named said via email, as “they do not need the likes of M&M to remain competitive.”
Couche-Tard “has been putting an immense amount of effort into its food business for several years already,” said another analyst that covers the company, who also asked not to be attributed directly. “Their focus is what they call 'Fresh Food, Fast,' so obviously a different approach than frozen.”
As fuel retailers adapt to the rise of electric vehicles, food services are becoming an increasingly important aspect of their business models as average customer dwell time - how long drivers spend at a refueling station - grows dramatically from just a few minutes for drivers of gasoline-powered vehicles to a minimum of 20 to 30 minutes for EV drivers.
“Hot food will also be an attraction as more customers charge their electric vehicles” at refueling stations, Kathleen Wong, who covers Couche-Tard for Veritas Investment Research Corporation, said via email. Parkland’s acquisition of M&M, she said, “affirms the attractiveness of the food service strategy for Couche-Tard.”
