Circle K Focuses on Tobacco

The chain’s ‘Tobacco Club’ has more than four million members.

October 03, 2018

MONTREAL – Alimentation Couche-Tard Inc. has been courting its customers who smoke, Bloomberg reports. Earlier this year the Canadian owner of Circle K stores debuted its “Tobacco Club,” which gives U.S. members discounts on cigarettes. Currently, the club has more than four million members. The company now sells its private-label tobacco products in more locations.

Despite the shrinking number of smokers, Couche-Tard still focuses on them. “We’re committed to that category, committed to that customer,” said Couche-Tard Chief Executive Officer Brian Hannasch.

Jennifer Bartashus, a Bloomberg Intelligence analyst, said such strategies will work well for Couche-Tard, especially as other retailers such as CVS stop carrying tobacco products. Bartashus also saw electronic cigarettes as a way to fill in the gap.

With vaping, “once people are using the equipment, the role for a convenience store becomes a little easier in terms of refills, of the maintenance,” she said. “You’re starting to see some of the benefits of that behavior coming through, as well as additional attention that Couche-Tard is putting on the category.”

Meanwhile, Hannasch remained positive about the growth of U.S. tobacco sales during an analyst call last month. Nearly 5,000 U.S. stores now offer Tobacco Club memberships.