Single Store Owner

OCT 2016

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8 / Convenience Store News for the Single Store Owner / OCTOBER 2016 PERSPECTIVES Big Changes Coming to C-store Industry's Biggest Chains 7-Eleven and Couche-Tard announce significant expansion moves I rving, Texas-based 7-Eleven Inc. and Laval, Quebec-based Alimentation Couche-Tard Inc. are already the first and second largest convenience store operators in the United States, respectively, in terms of store count. But both are about to get even bigger. In late September, 7-Eleven's parent company Seven-Eleven Japan Co. (a unit of Japanese retail giant Seven & i Holdings Co. Ltd.) publicly stated it plans to more than double its store count in the United States, increasing its current portfolio of 8,500 stores to 20,000 stores. According to media reports, President Kazuki Fu- ruya explained that the U.S. unit is prepared to expand its network now, after having introduced Japanese- style product development and services through personnel exchanges with Seven-Eleven Japan. The channel's increased focus on quality prod- ucts has attracted middle-class consumers, he said, when traditionally, convenience store customers in the U.S. tended to be lower income. "If convenience stores continue to evolve, there will be chances [to grow]," Furuya added. Meanwhile, Circle K parent Couche-Tard on Aug. 22 announced a definitive merger agreement with CST Brands Inc., the 12th largest U.S. conve- nience store operator in store count. Upon comple- tion, the $4.4 billion deal will mark Couche-Tard's biggest acquisition ever and make it the largest independent c-store operator in the U.S. in terms of company-operated stores. As part of the deal, Couche-Tard is poised to acquire 1,146 CST Brands c-stores, primarily operating under the Corner Store, Nice N Easy and Flash Foods brand names. Couche-Tard will also control the general partner of Allentown, Pa.-based CrossAmerica Partners LP. With the addition of the CST Brands stores, Couche-Tard will have a strong presence in nearly all regions of North America, with the only exceptions being some pockets of the U.S. Mid-Atlantic region and the U.S. Upper Midwest region, consisting of the states of Idaho, Montana, North Dakota, South Dakota, Nebraska, Wyoming and Utah. "It's really a great fit," Couche-Tard CEO Brian P. Hannasch said, noting the markets of Georgia — where Couche-Tard currently has no presence — and Texas, where Couche-Tard only has a limited presence, were especially desirable. "We really had a gap in Georgia where CST has Flash Foods stores. And Texas is a fast-growing market." Once the deal is approved by CST's shareholders, as well as Canadian and U.S. authorities, Couche- Tard will sell CST's Canadian retail assets to Park- land Fuel. SSO With the addition of the CST Brands stores, Couche-Tard will have a strong presence in nearly all regions of North America, with the only exceptions being some pock- ets of the U.S. Mid-Atlantic region and the U.S. Upper Midwest region.

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