LAVAL, Quebec — Along with the decision to “harmonize” its U.S. convenience-store brands by converting the 1,500 Kangaroo Express locations it acquired from The Pantry in early 2015 to the Circle K brand, Alimentation Couche-Tard Inc. is also evaluating its fuel-brand portfolio.

“We’re currently looking at our portfolio brands that we have in place. This work is well advanced, and we’ll implement our go-forward strategies in the first half of calendar 2016,” president and CEO Brian Hannasch said during the company’s latest earnings call.

The Pantry had sold a mix of fuel brands, from its own Kangaroo to BP, CITGO, ConocoPhillips, ExxonMobil, Marathon, Shell and Valero.

The convenience-store branding transition arrives as Couche-Tard’s same-store fuel volumes rose 9.4% in the United States, compared to 2.7% growth in its European network and a 1.4% increase at its Canadian sites.

“The U.S. fuel results continue to be very solid in both the legacy and Pantry networks,” said Hannasch. Couche-Tard’s heritage U.S. stores outperformed typical industry demand growth of 2% to 3% during the first quarter, while The Pantry network was accretive to the overall results, he said.

Business conditions in the United States are especially strong compared to Couche-Tard’s international markets and providing a nice tailwind to the company’s performance. Same-store merchandise sales in the United States rose 5.1%, compared to a 2.3% increase in Canada and 1.3% growth in Europe.

“Certainly globally we’re benefitting from lower fuel prices, and it’s effectively a tax refund for our customers,” said Hannasch. “More so in the U.S. than other markets, we’re seeing them being willing to spend it.”

Thanks to the strong performance of fresh food, prepared foodservice, coffee and private-label initiatives, Couche-Tard is also seeing less pressure to promote to drive traffic to stores than in recent years, and it is seeing more traffic on the forecourt. This, in turn, is driving more customers into the stores, creating yet another shopping occasion.

Couche-Tard has introduced Circle K’s Polar Pop fountain brand to 100 of the newly acquired sites over the last 45 days, and plans to roll it out to an additional 900 sites in this fiscal year, in advance of the store brand change.

Couche-Tard launched its most recent prepared-on-site concept in three stores in the Houston market about 90 days ago, and plans to roll it out to two other pilot markets over the coming months. Its Fresh Food Initiative (FFI), which harnesses third-party commissaries to deliver fresh food items multiple times per week to stores, has similarly proven promising, the company said.

The program, which delivers items such as pastries, salads, sandwiches and fruit cups, has yielded improvements in logistics, cost and spoilage—so much so that Couche-Tard is rolling it out to an additional 300 stores this fiscal year.

The company has rolled out its new Circle K Premium coffee program to 250 stores, including 160 sites in Canada. These sites are outperforming base stores in cups per day. And it has launched 120 private-label SKUs over the last year in the candy, snacks and beverages categories. Across the Couche-Tard business units, private label has already achieved 2% to 5% penetration.

“These types of results help inspire and motivate our teams to continue their great work,” said Hannasch, “The road ahead is full of opportunities that we will and must take advantage of.”

As of July 19, 2015, Laval, Quebec-based Couche-Tard’s network included 7,987 convenience stores throughout North America, including 6,556 stores offering fuel. Its North American network consists of 15 business units, including 11 in the United States covering 41 states (under the Circle K and Kangaroo Express flags) and four in Canada covering all 10 provinces (under the Mac’s and Couche-Tard flags).

In Europe, Couche-Tard operates a broad retail network across Scandinavia (Norway, Sweden and Denmark), Poland, the Baltics (Estonia, Latvia and Lithuania) and Russia. In addition, about 4,700 stores are operated by independent operators under the Circle K banner in 12 other countries or regions worldwide (China, Guam, Honduras, Hong Kong, Indonesia, Japan, Macau, Malaysia, Mexico, the Philippines, the United Arab Emirates and Vietnam), which brings to more than 14,900 the number of sites in Couche-Tard’s network.

ALBANY. N.Y. — A ban on the sale of soft drinks 16 ounces or larger is back on the table in New York, this time specifically aiming at children younger than 18 years old and coupled with warning labels on sodas.

State assembly member Matthew Titone introduced the bill this past week, pointing to research that indicates sugar sets up the same need-and-reward system as heroin, alcohol and opiates, which is why he also proposed a companion measure requiring warning labels on sodas, according to a New York Post report.

“We are unintentionally consuming obscene amounts of sugar,” Titone said, according to the newspaper report. “The idea is to create some sorts of safeguards. It’s addictive. It’s not good for our health. We need to start somewhere.”

The proposal follows a long-fought battle by former New York Mayor Michael Bloomberg to ban drinks larger than 16 ounces. New York’s highest court blocked the ban in June 2014.

Titone said he positioned his bill in a way that wouldn’t be shot down by the courts and would still raise awareness about sugar consumption and curb obesity, diabetes and heart disease.

“If you want your child to have that obscene amount of soft drink, you can buy it for your child,” he told The Post, “and yes, you can still send your child to the store for the 2-liter bottle.”

He compared his proposal to kids viewing an R-rated movie with their parents’ OK: “Your kids can still have it, but we’re saying it might not be appropriate.”

Titone said he has yet to find a sponsor in the state Senate for the bill.

HERSHEY, Pa. — The Hershey Co. has been recognized as a top company and workplace for millennials in the Youth 100 VoxBurner Report and 2015 Millennial Career Survey by the National Society of High Sch1ool Scholars (NSHSS).

The candy and snack company ranked No.4 out of 100 companies and No.1 in the Grocery & Snacks category in the VoxBurner Report. Hershey also ranked No. 20 out of the Top 200 Preferred Companies in 2015 by students aged 19 to 25 across the nation.

• Overall Winner: YouTube
• Fashion: Nike
• Fast Food & Restaurants: Subway
• Grocery & Snacks: Hershey’s
• Health & Beauty: Colgate
• Internet, Mobile & Apps: YouTube
• Media & Entertainment: Netflix
• Money & Finance: Visa
• Non-Profit: Make-A-Wish Foundation
• Retail & Etail: Amazon
• Soft Drinks: Gatorade
• Technology: Samsung
• Travel & Living: American Airlines

“As a company with more than 120 years in the marketplace, we are thrilled that our iconic brands connect with millennials,” said Michele Buck, president North America for Hershey. “Young people want to work for companies that make the brands they love and where they are able to make a difference and give back to the community. It’s gratifying that Hershey has been recognized as one of these places.”

Millennials’ influence in the marketplace continues to grow both in buying power and impact on food trends. By 2020, millennials will make up 29% of consumer packaged goods spending. As the company continues to grow and expand, Hershey believes in having employees that reflect the demographics of its consumers, said Buck. By building a collaborative and engaging workplace for employees across geographies, the company keeps a pulse on key trends and continues to deliver exciting products around the world, she said.

“We welcome eager and talented young professionals into our workplace,” said Kevin Walling, senior vice president and chief human resources officer for Hershey. “Diversity of thought, perspectives and experiences make for stronger teams and ideas—key ingredients for Hershey to achieve success across the snack continuum.”

According to NPD’s Future of Eating report in 2014, millennial and generation Z consumers desire customized, meaningful food experiences. Young people also seek fresh, convenient and delicious snacking options that are increasingly replacing their meals. Recognizing this change in consumer interests and lifestyles, Hershey is creating innovative, great-tasting snacks that appeal to millennial consumers, it said

Hershey is a global confectionery leader in chocolate, sweets, mints and other snacks. The company, , based in Hershey, Pa., has more than 80 brands around the world that drive over $7.4 billion in annual revenues, including Hershey’s, Reese’s, Hershey’s Kisses, Jolly Rancher, Ice Breakers and Brookside.

TOKYO —After test markets in Japanese, Italian and Swiss cities, Philip Morris International’s iQos cigarette expanded into 12 cities in Japan on Tuesday, reported the Nikkei Asian Review. The iQos (pronounced “eye-cos”) is a heat-not-burn cigarette that warns up real tobacco with an electrical heating element.

“Am I optimistic?” Laurent Boissart, president of Philip Morris Japan, said during a press conference. “No, I am confident in our $2-billion investment.”

A team of 400 Philip Morris International engineers, scientists and technicians in Switzerland began developing the iQOS approximately 10 years ago. Tomoko Iida, manager of scientific regulatory affairs at Philip Morris Japan, said that “90% of the toxicity is eliminated with the iQOS, compared with traditional cigarettes”—though the company cannot officially say the iQos is healthier than cigarettes because research has not yet been finalized. Findings from the Swiss research team should be ready for publication by the end of 2015.

Philip Morris International promises the iQos delivers an experience akin to combustible cigarettes.

Mariko Tai, a writer for the Nikkei Asian Review, had a slightly different reaction.

“The first thing one notices about the iQOS is that it is heavier than a regular cigarette,” she said. “It feels almost like holding a fountain pen. The product is not for people who want to puff away while typing at the computer.”

The iQOS is made up of a tobacco stick about half the length of a cigarette (called a Heatstick) that’s heated by a blade inside a holding device. It takes about 20 seconds for the device to warm up.

“The iQOS might be a bit strong for people who smoke light cigarettes because the nicotine content is fixed,” said Tai. “Chain smokers might be put off by the limited battery life. After six minutes or 14 drags, the battery dies. It takes another six minutes to recharge and light up again.”

Boissart said Philip Morris International chose to launch the iQos in Japan for a combination of reasons.

Besides being one of the world’s largest tobacco markets (with 20 million smokers), Japanese consumers are also more willing to embrace new technologies.

“Japanese consumers are quite interested in new products and innovation,” Boissart said. “They are also extremely demanding not only when it comes to quality of products, but also [in terms of] customer service.”

The iQos comes in four flavors: regular, balanced regular, menthol and mint. A pack of 20 goes for 460 yen ($3.80).

Although there are currently no plans to bring iQos to the United States, Altria Group Inc., Richmond, Va., entered into a strategic partnership with Philip Morris International to exclusively market vapor products like iQos stateside.

Click here for the full Nikkei Asian Review report.

OAKBROOK TERRACE, Ill. —Typically, it’s not exactly welcome news when a retailer sees category sales go flat. But cigarettes are hardly a typical category. Cigarettes are a crucial driver of convenience-store traffic (NACS data suggests it commands 35.9% of all in-store sales), yet the category is widely expected to decline 3% to 4% with every passing year.

But in 2014, cigarette sales did not decline by 3% to 4%. In fact, same-store cigarette sales grew by 0.1% according to NACS State of the Industry (SOI) numbers, prompting Kevin Smartt, CEO of the Austin, Texas-based Kwik Chek Food Stores Inc., to proclaim at the April SOI Summit that “flat is the new up.”

As 2015 has progressed, an even more shocking trend has surfaced in the category: Up is the new up. Nielsen reported U.S. cigarette industry volumes grew by 0.5% in first-quarter 2015, while Management Science Associates (MSA) retail shipment data suggests premium cigarette volumes were up as much as 2% in June 2015.

At the store-level, many retailers report the Nielsen/SOI/MSA numbers are accurate.

“We finished 2014 flat, right along with NACS data,” said Andrea Myers, president of Kocolene Marketing LLC, Seymour, Ind. “In spring, when gas prices started to decline, sales really started picking up. People have more money to spend.”

For others, a 0.5% to 2% increase is on the conservative side. Speedee Mart operations manager Ray Johnson said the Las Vegas-based retailer has seen its year-over-year cigarette sales increase by 5% as of July.

Even retailers in notoriously anti-tobacco states are noticing this phenomenon. Despite operating in a state with the second highest excise taxes in the country, cigarette sales at Cumberland Farms are up according to Anne Flint, senior category manager for the Framingham, Mass.-based operator.

“In the state of Massachusetts, you’d have to take a second mortgage on your house to buy a carton of Marlboros,” Flint said. “But I am seeing growth (even in carton sales), which is surprising.”

“We’re definitely seeing much better than expected volumes,” said RBC Capital Markets tobacco analyst Nik Modi. “I don’t think there are new consumers coming into the category. What’s probably happening is we’re seeing people buying cartons or multiple packs at a time.”

Myers said premiums are the big benefactor of this cigarette renaissance, and numbers from Nielsen back her up. The firm reported premium cigarettes accounted for 80.4% of c-store cigarette sales and were up 0.4% in 2014. By contrast, branded discount sales were flat and sub-gen/private and fourth-tier cigarette sales declined.

“People are trading up,” Flint said. “They go up to premium because they can buy a Marlboro now whereas they couldn’t before.”

The Factors

Like Myers, Modi believes more favorable gas prices are playing a major role in the positive cigarette sales. Sure, gas prices are no longer as low as they were in late 2014 and early 2015; but even the $2.61-per-gallon average reported by FactSet in July is significantly lower than the $3.22-per-gallon cost the United States has averaged over the last three years.

“Everyone talks about [how] gas prices coming down didn’t really help the consumer, but I think that’s taking too much of a cookie-cutter approach,” said Modi. “If you sell in the convenience channel and you sell an impulse-driven good, then you’re actually seeing the good of lower gas prices.”

It has been a double positive for convenience-store operators.

“I always say, (retailers) like low gas prices because remember, we have to pay for the gas first,” Myers said. “With lower gas prices comes better sales inside the stores because consumers aren’t spending all their money filling up their tank.”

While lower gas prices have benefitted everyone, an extra $10 carries a whole lot more weight for the low-income consumers that make up the core of both convenience-store and tobacco shoppers. Modi has long tracked the “core tobacco consumer” and sees a slew of positive trends, including a 6% increase in payroll for workers without a high school diploma (vs. a 3.5% increase for workers with a bachelor’s degree or more) and construction, manufacturing and hospitality unemployment rates dipping below 7% for the first time since before the recession.

“The unweighted tobacco consumer curve we’ve been tracking for some time continues to go in the right direction,” he says. “I’m feeling very good overall about the tobacco consumer.”

“More disposable income year-over-year definitely plays a big role,” agrees Flint. “We’re seeing that play out in our stores.”

Another factor: CVS pulling tobacco from its shelves in October 2014.

“With CVS getting out of the tobacco business, we’re finally starting to see the benefits accrue towards the convenience store channel,” said Modi. “I think that is going to continue.”

More than just the CVS smokers, it’s possible that convenience stores are gaining customers from other drug chains.

“Even though drug stores still carry them, c-stores are one of the few places that people still feel okay to buy cigarettes,” Flint said. “With CVS [exiting the category], does that give the wrong connotation for people to go into a drug store to buy cigarettes? There might be some psychological effects on purchase patterns.”

Other retailers, such as Johnson of Speedee Mart, credit a waning interest in electronic cigarettes.

“For a while it was looking like e-cigs were going to be so much more cost-effective,” he says, also citing a lack of major e-cig product innovation. “Consumers are losing interest and maybe going back to cigarettes.”

Taxes—or the lack thereof—are also a likely source of the uptick. In 2014, only Vermont raised its excise tax on cigarettes (by just 13 cents per pack) and the federal excise tax has not been raised since 2009.

Even regional issues such as weather have played a role. Though bad weather typically hurts sales, not helps, Flint says the Northeast’s record-breaking snowy winter actually improved cigarette sales for a variety of reasons.

“People figured they were never going to be able to buy another pack of cigarettes because they were snowed in, so they bought a carton or stocked up,” she said. “Some of it might also be people were home more, so they could smoke more because of all the smoking bans.”

Watch for more coverage on cigarette sales in the September issue of CSP magazine.

PLANO, Texas — The Snapple beverage brand has seen a sustained upswing of key consumer-perception metrics over the past 60 days, according to YouGov BrandIndex. Generated by two back-to-back campaigns, the momentum has earned Snapple its first “Brand To Watch” distinction from BrandIndex, a daily brand consumer-perception research service.

Over the past two months, Snapple has been in the top 10 gainers among all major U.S. brands in three metrics:

• General Impression (“Do you have a general positive feeling about the brand?”)
• Purchase Consideration (“When you are in the market next to purchase a beverage, from which of the following brands would you consider purchasing?”)
• Ad Awareness (See charts below.)

To determine its Brand To Watch, BrandIndex’s tracking universe of more than 1,400 brands was crunched over the past 60 days to determine the very top brands with the biggest significant gains across multiple metrics. More than 12,000 people were interviewed over the past 60 days with a margin of error of +/- 3%.

Snapple’s promotions cut right to the personal connection between the drink itself and its many longtime fans, BrandIndex said. The one-two punch started in early April with spots of everyday New Yorkers urging the rest of the country that “we want you to love it too.” Then in May, “America’s Got Talent” host Nick Cannon coaxed fans to use the #lovesnapple hashtag along with a paid Jimmy Fallon Tonight Show spot involving a plant in the audience.

After a subdued first four months of 2015, with only 9% of U.S. adults 18 and over aware of Snapple advertising, that percentage more than doubled to 20% by the end of June, according to the BrandIndex report. It recently settled in at 17%, still well above its initial levels.

“While the two campaigns seem to have helped bring Snapple to its still-going highest Impression levels of the year, it’s the potential revenue metric of Purchase Consideration that may really shine for Dr Pepper Snapple Group and distributors,” BrandIndex CEO Ted Marzilli wrote.

In early May, 17% of adults 18 and over said they would consider buying Snapple the next time they want to purchase a beverage. Since July 20, that percentage has held steady at 25%, according to the report.

PLANO, Texas — The Snapple beverage brand has seen a sustained upswing of key consumer-perception metrics over the past 60 days, according to YouGov BrandIndex. Generated by two back-to-back campaigns, the momentum has earned Snapple its first “Brand To Watch” distinction from BrandIndex, a daily brand consumer-perception research service.

Over the past two months, Snapple has been in the top 10 gainers among all major U.S. brands in three metrics:

• General Impression (“Do you have a general positive feeling about the brand?”)
• Purchase Consideration (“When you are in the market next to purchase a beverage, from which of the following brands would you consider purchasing?”)
• Ad Awareness (See charts below.)

To determine its Brand To Watch, BrandIndex’s tracking universe of more than 1,400 brands was crunched over the past 60 days to determine the very top brands with the biggest significant gains across multiple metrics. More than 12,000 people were interviewed over the past 60 days with a margin of error of +/- 3%.

Snapple’s promotions cut right to the personal connection between the drink itself and its many longtime fans, BrandIndex said. The one-two punch started in early April with spots of everyday New Yorkers urging the rest of the country that “we want you to love it too.” Then in May, “America’s Got Talent” host Nick Cannon coaxed fans to use the #lovesnapple hashtag along with a paid Jimmy Fallon Tonight Show spot involving a plant in the audience.

After a subdued first four months of 2015, with only 9% of U.S. adults 18 and over aware of Snapple advertising, that percentage more than doubled to 20% by the end of June, according to the BrandIndex report. It recently settled in at 17%, still well above its initial levels.

“While the two campaigns seem to have helped bring Snapple to its still-going highest Impression levels of the year, it’s the potential revenue metric of Purchase Consideration that may really shine for Dr Pepper Snapple Group and distributors,” BrandIndex CEO Ted Marzilli wrote.

In early May, 17% of adults 18 and over said they would consider buying Snapple the next time they want to purchase a beverage. Since July 20, that percentage has held steady at 25%, according to the report.

OAK BROOK, Ill. — McDonald’s Corp. said its restaurants will start selling all-day breakfast across the United States on October 6, fulfilling a longstanding customer request.

The company’s franchisees have voted to approve the plan, and it is being implemented nationwide, McDonald’s spokesperson Lisa McComb told Bloomberg. The move–the company’s biggest menu change in years–follows months of testing the idea at selected locations.

In July, CEO Steve Easterbrook said the all-day breakfast trials were going well, fueling speculation that a national rollout was near.

Easterbrook, who took over in March, has been trying to pull the company out of its worst sales slump in more than a decade. Selling its signature Egg McMuffin sandwich all day could increase sales by as much as 2.5% a year, according to an internal company presentation.

Under the plan approved by franchisees, the full morning lineup will not be available all day. Restaurants will sell either muffin- or biscuit-based sandwiches, along with hot cakes, sausage burritos, fruit-and-yogurt parfaits, oatmeal and hash browns. McDonald’s may get rid of other items to make room for breakfast, McComb said.

“Our rest-of-day core menu items will stay intact, such as the Big Mac, Quarter Pounder with Cheese, McNuggets, fries, etc.,” she said. “But regions can determine what items need removing based on local customer preferences.”

Franchisees own about 90% of the company’s approximately 14,350 domestic restaurants.

The move may help McDonald’s better compete with chains that already sell morning items throughout the day. Dunkin’ Donuts serves its breakfast sandwiches, as well as egg wraps and bagels, beyond the morning. And Starbucks Corp. offers muffins and scones at all hours.

Daniel Delligatti, the Oak Brook, Ill., chain’s national advertising fund chairman, told franchisees last month that the company was planning a marketing push to promote the move.

“Based on preliminary test results, all-day breakfast is a significant business opportunity and a marketer’s dream that leverages our strengths and will generate positive media news and social media energy,” he told the news agency.

McDonald’s has made no formal press announcement about the move; it has launched a social media blitz, primarily on Twitter, under the hashtag (hashbrowntag?) #AllDayBreakfast

ARNHEM, Netherlands— Protein brings with it the perception of health. And for convenience-store retailers, this magic ingredient is helping boost meat snack category growth.

According to Netherlands-based Food Ingredients First’s Innova Market Insights data, nearly 15% of global meat snacks launched in the 52 weeks ending April 2015 used protein claims, rising to more than 50% in the United States.

“Even prior to the emergence of this enhanced interest in protein, the meat snacks market was showing good growth globally,” said Lu Ann Williams, director of innovation for Innova Market Insights. “[It reflects] the rising demand for more substantial snacks suitable for eating on the go.”

With a few exceptions, including the United States and South Africa, the market remains relatively undeveloped. Launch numbers remain small in terms of meat snack introductions as a whole, with just 5.5% of the global total in the 52 weeks ending March 2015.

Asia dominated activity with more than 60% of introductions, mainly a result of the large number of traditional-style meat snacks being launched in China. North America, primarily the United States, took second place ahead of Europe, where, despite the large number of countries and cuisines involved, the relatively underdeveloped status of the market limited new product activity.

Fourth Place And Climbing

Meat snacks are the fourth largest savory snacks category in the United States after potato chips, tortilla chips and nuts/trail mixes. The market is dominated by jerky-style products and, despite being relatively mature, has shown good growth in recent years.

Manufacturers have updated their product ranges to focus on a healthier image, more convenient packaging formats and a greater choice of increasingly complex flavor options, particularly hot and spicy variants, often with an ethnic twist.

Indeed, there’s no shortage of new meat snack items that run the gamut from exotic to handcrafted and grass-fed beef processing, including:

• Jack Link’s Korean BBQ Pork Flame-Grilled Jerky. Its flavor profile conjures the Eastern Asian-style cuisine. Finished over an open flame, the sweet pork flavor contrasts with double-toasted sesame seeds and caramelized brown sugar notes and incorporates hints of white onion and garlic.
• Old Wisconsin. A true meat snack staple—old-fashioned and handcrafted with a hardwood-smoked taste—but with a twist with the introduction of its Fast Fuel Sausage Sticks and Bites.
• Chomp Snack Sticks. It places an emphasis on the use of leaner grass-fed beef with Crankin’ Cran Chomps, made with spicy habanero peppers and healthy carbohydrates through cranberries.

And there’s likely more innovation ready to fill the pipeline soon if new opportunities are maximized. To that end, Innova Market Insights cites an ongoing interest in extending the use of different types of meat beyond beef and turkey, with launches including chicken and bacon products.

While the U.S. market is well-established and mature, the European market is much smaller, less developed and dominated by salami-style products rather than jerky, stated Innova Market Insights’ Williams.

It saw a highly significant development in 2014, however, with the divestment of Unilever’s market-leading Peperami and BiFi European meat snacks businesses to market leader Jack Link’s. The addition of Unilever’s business, incorporating two iconic brands, was “a huge leap forward, instantly taking Jack Link’s to leadership of the market and giving it a strong portfolio across both jerky and salami snacks,” the market researcher stated.   

With the underdeveloped status of the meat snacks market outside the United States, there are clearly further opportunities for growth, “particularly if the image of the products can be delivered as tasty, healthy, substantial and convenient snacks for all occasions, boosted by ongoing product and promotional initiatives,” said Williams.

LAVAL, Quebec – Mainly due to the effect of acquisitions and organic growth, for its first quarter of fiscal year 2016 ended July 19, 2015, Alimentation Couche-Tard Inc. has reported net earnings of $303.8 million, compared to net earnings of $269.2 million for the same period for the previous year.

Lower fuel gross margins in part offset these factors.

“The integration of The Pantry stores is well underway, with a lot of activity on all fronts. We are already seeing solid results, and I am excited to see how this network will perform with the implementation of key programs and harmonization of the brands” said Brian Hannasch, president and CEO.

“Building on the momentum of the last few quarters, we recorded strong organic growth in all our markets, both in terms of merchandise and service and in road transportation fuel. We believe our results compare very favorably to the results of our competition in the majority of our markets. We achieved these results through the continued improvements we made to our network and our product offer, our excellent retail execution and growing recognition by consumers of our private-label products. Those products include our European fuel brands miles and milesPlus which continue to contribute to growing fuel volumes and gaining market share while maintaining healthy margins,” said Hannasch.

“Despite a lower U.S. fuel margin than that of the comparable quarter of the previous fiscal year, we delivered a solid increase in net earnings through strong organic growth and well-integrated acquisitions,” Raymond Paré, vice president and CFO, said. “We were able to maintain tight cost control while establishing two new business units in the United States and deploying considerable efforts towards the integration of The Pantry stores. Our indebtedness ratios remain solid compared with the industry, even after the acquisition of The Pantry.”

He continued, “We have a very strong balance sheet supported by great real-estate assets and solid sustainable cash flow. … We are still excited by the opportunities for organic growth, including our growing foodservice offering, the implementation of synergies and great top line momentum, as well as any potential acquisitions.”

“Since the acquisition, we have already taken actions that should allow us to record annual cost reductions we estimate at approximately $50 million before income taxes. During the 12-week period ended July 19, 2015, we recorded cost reductions estimated at approximately $9 million, before income taxes. We believe this amount does not represent the full annual impact of all of our initiatives. … Furthermore, we have taken actions that should allow us to reduce our cost of goods sold by approximately $17 million. … These reductions mainly result from the negotiation of better supply conditions and economies of scale. We estimate the realized savings for the 12-week period ended July 19, 2015, at approximately $3.0 million before income taxes.”

Same-store merchandise revenues up 5.1% in the United States, 1.3% in Europe and 2.3% in Canada. The merchandise and service gross margin increased by 0.4% in the United States and by 0.2% in Europe but decreased slightly in Canada by 0.1%.

Same-store road transportation fuel volumes grew by 9.4% in the United States, 2.7% in Europe and 1.4% in Canada. Road transportation fuel gross margin at US 18.34 cents per gallon in the United States, at 9.60 cents (U.S.) per liter in Europe and at 6.36 cents (Canadian) per liter in Canada.

On June 2, 2015, the company acquired Tiger Tote Food Stores Inc. and its affiliates, 21 company-operated convenience stores in Texas, Mississippi and Louisiana, from Cinco J, Inc. It owns the land and buildings for 18 sites and lease the land and own the buildings for the remaining three sites. As part of this agreement, it also acquired 141 dealer fuel supply agreements, five development properties as well as customer relations for 124 dealer sites.

In addition, during the first quarter of fiscal 2016, it acquired five additional company-operated stores through separate transactions.

Also, the company completed the construction, relocation or reconstruction of 17 stores during the first quarter of fiscal 2016. It added or improved a total of 22 convenience stores through the construction of new stores, the relocation or reconstruction of existing stores and the acquisition of single stores. Furthermore, as of July 19, 2015, it had 31 c-stores under construction.

As of July 19, 2015, Laval, Quebec-based Couche-Tard’s network included 7,987 convenience stores throughout North America, including 6,556 stores offering fuel. Its North American network consists of 15 business units, including 11 in the United States covering 41 states (under the Circle K and Kangaroo Express flags) and four in Canada covering all 10 provinces (under the Mac’s and Couche-Tard flags).

In Europe, Couche-Tard operates a broad retail network across Scandinavia (Norway, Sweden and Denmark), Poland, the Baltics (Estonia, Latvia and Lithuania) and Russia. In addition, about 4,700 stores are operated by independent operators under the Circle K banner in 12 other countries or regions worldwide (China, Guam, Honduras, Hong Kong, Indonesia, Japan, Macau, Malaysia, Mexico, the Philippines, the United Arab Emirates and Vietnam), which brings to more than 14,900 the number of sites in Couche-Tard’s network.