Couche-Tard Grabs 109 “Dépanneur du Coin” And Increases Its Quebec Network To A Record 683 Stores

4 December 20174 December 2017 DepQuébec couche-tard, cst, depan express, depan express, dépanneur du coin, parkland

Last August (see article here), we reported that Couche-Tard was beginning to take possession of “Dépanneur du Coin” stores in the wake of its CST Brands acquisition, the largest in its history with a network of 2,000 c-stores and gas stations in Canada and the US.

And while Couche-Tard was taking over all of CST’s US assets, it was reselling a large portion of its Canadian assets to Alberta-based Parkland Petroleum at a price of C $ 985 million to avoid overconcentration in the market and thus, to gain approval of Canadian regulatory authorities, which was granted in June 2017 in both the United States and Canada.

In Canada, Couche-Tard announced its intention to keep 157 CST stores in various provinces, namely Quebec, Atlantic Canada and Ontario. But which? On that, we wrote three months ago that “we will see as they are converted”.

Prior to its purchase by Couche-Tard / Parkland, the “Dépanneur du Coin” banner was the second largest corporate convenience banner in Quebec, with some 200 stores (corporate = fully operated by the Company and not by independent or franchised retailers) ). The Dépan Express banner, on the other hand, groups franchise retailers.

So having said that, we have just completed the inventory of the acquired stores and through patient research, determined that of the 200 Dépanneur du Coin stores in Quebec, 109 have become Couche-Tard while the rest, 91, kept its original banner under the new ownership of Parkland.

Out of the 200 Dépanneur du Coin stores acquired, Couche-Tard kept 109 representing 55% of the whole network. In some regions, such as Lanaudière and Montreal, it has retained the vast majority of stores, while in others it kept a smaller portion.

“Dépanneur du Coin” is a pristine banner of c-stores offering Ultramar gasoline with great locations, modern and well-maintained equipment, several including interesting amenities such as ready-to-eat countertops. The banner’s network is present all across Quebec but also in other Eastern Canada provinces under the “Corner Store” brand.

This cafeteria style food counter offering fries, hot dogs, hamburgers and more is housed in a Dépanneur du Coin store located in Sainte-Agathe. It is among the outlets that Couche-Tard has chosen to keep.

Parkland, for its part, grabbed the balance of stores, or namely 91 of the 200 existing “Dépanneur du Coin” stores. The Alberta oil distributor also acquired the supply contracts for the 100 Dépan Express Ultramar gas stations located in Quebec, a secondary banner dedicated to franchised retailers.

Sharing of stores: on what basis and according to which criteria?

It’s fun to imagine the scene: “Well, you take this one and that one, we’ll take this one and those, but not that one. We want this one too, but not that one”.

Maybe, but probably not. Surely, in reality, it did not happen that way. But still, how the heck did Couche-Tard and Parkland decided to split the 200 “Dépanneur du Coin” stores? It’s quite interesting to figure out.

This former “Dépanneur du Coin” store on Provost Street in Lachine is among the ones kept by Couche-Tard despite the fact that the chain has already two stores on the same street on a 1 km stretch. We can still see the trace of the “Dépanneur du Coin” oval logo against a background of dark blue and orange-yellow, its two key brand colors.

Looking at stores’ distribution, it would be logical to expect that Couche-Tard sets his sights on stores that are not in direct competition with its existing ones, i.e. not located directly in front of them.

Some being also better located than others in terms of volume, traffic and others, there have certainly been negotiations and preferences in this regard.

Also, we can infer that regulatory competitive issues, namely concerns to avoid too much concentration, had factored in the choice of stores.

This is at least what a first overview of the attributed stores suggests.

Transaction impact in Laval

Looking at a specific region such as Laval, we can see that Couche-Tard increased its network by 26%, its number of stores going from 34 to 43.

In Laval, before the transaction, there were 34 Couche-Tard stores (red and blue markers) and 16 Dépanneur du Coin stores (red and yellow markers). On the map above, we identified four areas (see the circles) where the stores acquired were very close to existing ones. So we tended to believe that these will probably go to Parkland to avoid a situation where Couche-Tard would end up with two stores aside.

In reality, this factor did not seem to have weighed too much in the balance. As can be seen on the above map, Dépanneur du Coin stores that were very close to existing Couche-Tard stores have all become Couche-Tard, some of which, in two places, are squarely opposite one another or next to it.

However, at closer look, the expected proximity is misleading. In two places, a highway separates the acquired and existing stores. In two other places, they are very close indeed but the existing one is a traditional convenience store while the acquired one is a gas station.

On the Cartier boulevard in Laval, Dépanneur du Coin with gasoline and Couche-Tard without gasoline shared the same intersection. From now on, there will be two Couche-Tard stores, one with and the other without gas.

On Concorde Boulevard East, the same scenario: a Dépanneur du Coin with gasoline is at a few hundred feets of a Couche-Tard without gasoline (see in the back, past the Caisse populaire). From now on, both will feature the Couche-Tard banner.

First conclusion: the complementary nature of the “Dépanneur du Coin” gasoline offer has weighed in the balance in order to opt for a site, regardless of its proximity to an existing traditional store.