LAVAL, Quebec -- “I think we can get to 25,000 stores eventually.”
Such is the confidence of Alain Bouchard, president and CEO of Canada’s Alimentation Couche-Tard, parent company of Circle K convenience stores in the United States, when asked how large his company can get.
During a Q&A with Financial Post Magazine, Bouchard--now known as one of the premier aggregators of convenience stores in North America and, recently, Europe with this year’s purchase of 2,000 Statoil stores--answered many questions about how his company operates and where he sees future growth potential. Here are some highlights of the interview:
Alain BouchardFPM: Do you lament the disappearance of the mom and pop stores?
Bouchard: I’ve always been a big defender of independent operators. They help us be better in our own business. So yes, it’s sad to see their numbers declining. That’s linked, of course, to the natural evolution of retailing, paired with the question of [serving] gasoline and the opening hours of big grocers.
FPM: Why such an aversion toward head offices?
Bouchard: Over the years, I’ve heard people here say, “Oh hi, it’s Monique at head office. I need this done.” Then after the store manager answers, the person says, “No, no, no, no. Leave that customer order for now. I need this now.” That makes me angry. I’ve operated stores. When I’m hosting a customer and head office calls, head office is not important. So I brought all my people together here in Laval, Quebec, and I told them that story. I said, “Do you think that makes any sense? Do you know where your customers are? They’re in the stores. They’re not here in our offices. Have you seen our clients here? Never.”
FPM: So light in the sense of decentralization, you leave decision-making in local hands?
Bouchard: Yes. We decide very quickly. Sometimes too quickly. If you’re one of my store managers, and I meet you, ask you how it’s going, ask, “Why do you have this product? Is that authorized?” You say, “Yeah. It’s not in our planogram, but I have customers here that like this.” And this is a word that I learned in English that I didn’t know--my English came to me late--empowerment. We were doing that without me knowing the value of the word. Today, we use that word a lot. … We don’t want our store managers to sell dust collectors. But we do want initiation.
FPM: Isn’t there a risk in empowerment in that you don’t know what your stores are doing?
Bouchard: I don’t want to know. My head would explode if I knew everything that all my stores were doing. Trust doesn’t preclude control. So I trust you, but I’m putting control mechanisms in place
FPM: People often comment that you’re very disciplined in your acquisitions. Why is that?
Bouchard: I come back to the beginning of my life. … My father lost everything. So I don’t want to take uncalculated risks. I want to be disciplined because you can buy and fall in love with an acquisition, pay an impossible price and put the whole thing in peril. I’d rather pass.
FPM: Your run at purchasing Iowa-based Casey’s General Stores provoked some debate about the difference between takeover rules in Canada and the United States. Do you think the government should try to shield Alimentation Couche-Tard from a foreign takeover?
Bouchard: I think at the end of the day it’s the shareholder who should decide. Like it or not, the company belongs to someone, and in this case, it’s investors. It doesn’t belong to the government. So the less government intervention, the better off we are. That said, certain rules should be changed so that yes, boards of directors have more power. We find ourselves caught with our pants down a little bit in Canada with our 45-day poison pills.
That doesn’t make much sense to me. In the Casey’s deal, they had a poison pill that would have increased the purchase price for us by about $100 million. That would have been tough to swallow. But under the rules governing corporations in the United States, boards can take decisions like that to defend themselves.
FPM: How have you succeeded in expanding internationally when others have not?
Bouchard: The real answer is that I didn’t go into the U.S. with Canadians. I went there with Americans. I looked at the Americans that were there, and I convinced them that we had a culture that they’d like. And, actually, that’s what a lot of them tell me, that they’ve never worked harder in their lives, but that they love it. I don’t have anyone from Canada or the U.S. in Europe. It’s the same people already running Europe. Going into a new country market with your own people because you know them, [I don’t buy into that strategy]. When I take over a company with 200 stores, I keep the employees, and I keep the bosses. It’s a sharing of cultures. It’s empowerment. These are not just words. It’s the way we do business.
FPM: How big can Couche-Tard get?
Bouchard: We’ve grown past 12,000 stores now, including licensees. I think we can get to 25,000 stores eventually. We have many things [to drive growth] under way. We have licensees in Asia. We’ve just signed a big deal, and we’ll announce two new countries. Our American network is going very well. Our Canadian network has room to grow. And now we have the European network. And I think Europe can double over a certain period of years. I think the 25,000 number is not impossible. But I won’t lose sleep at night if I don’t reach it in five years. It may take 10.
Click here to read the complete text of this interview.