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Research Outline

Prepared for Maria P. | Delivered September 5, 2019

Circle K and Corner Stores Merger/Acquisition

Goals

To understand how the merger/acquisition of Circle K and Corner Stores impacted employees, investors, customers, and branding for the purposes of identifying best practices when one company acquires another company.

Early Findings

Preliminary research indicates there is quite a bit of data on how the acquisition of Corner Stores by Circle K (Couche-Tard) impacted investors, customers, and the brand itself. However, perception of employees is not as readily available.

INVESTORS

  • Analysts at Scotiabank have widely approved of the Circle K rebrand stating it was "a solid strategic move that was driving improved performance" of parent company Couche-Tard.
  • Scotiabank analyst Patricia Baker called Couche-Tard's "double again strategy" a "solid and well thought out" plan. The strategy calls for Couche-Tard to "double the company's business within five years and double its annual store openings to 200."
  • Brian Hannasch, Couche-Tard President and CEO, told investors the move should have been made a decade before it happened because "there’s just a lot of wins in this space."

CUSTOMERS

  • In some areas where Circle K is not a new brand, the rebranding of Corner Stores to Circle K has resulted in double-digit growth. Couche-Tard President and CEO Brian Hannasch said, "people [in these markets] immediately know that we have Polar Pop and other unique offers."
  • One customer stated they have "always liked Circle K, but I don't like their new logo. The new logo is a mistake."
  • Another customer was concerned the levels of cleanliness and service would decrease with the acquisition. They stated, "I have not been so impressed with the cleanliness, condition, or service in Circle K Stores as a whole but I always figure it is a trade off for what I consider to be discount prices... and there are some very nice Circle Ks. CST I always was impressed with its cleanliness." This customer did note that they expect to get better prices due to the acquisition because "Circle K seems to usually have more promotions and better prices than surrounding convenience stores."

BRANDING

  • Rebranding all Corner Store locations to Circle K will end up taking about 30 months.
  • All Corner Stores are expected to complete the rebranding efforts by 2020.
  • Rebranding included changing the Corner Store layouts to the Circle K layouts, replacing Corner Store private label products with Circle K private label products, and offering the Polar Pop fountain products.
  • Canadian retail sites that rebranded from Corner Store to Circle K expected to complete the transition by fall 2018, which included the addition of Circle K's key food concepts like "Roller Grill, Polar Pop, Simply Great Coffee, Froster, and Bake-on-site fresh bakery products."