Dive Brief:

• Alimentation Couche-Tard’s labor challenges across North America have greatly improved over the past year as the company continues to invest in ways to improve efficiency, President and CEO Brian Hannasch said during Couche-Tard’s first-quarter earnings call on Thursday.
• Hannasch noted that Couche-Tard is averaging over 25,000 job applicants per week for its convenience stores, compared to around 19,000 per week this time last year. Additionally, Couche-Tard’s 12-month turnover rate for its frontline teams “is trending materially better” compared to a year ago, he said.
• While Couche-Tard credits its “improving labor situation” to quality customer service and effectively controlling costs, the company’s Smart Checkout program is also helping, both Hannasch and CFO Filipe Da Silva emphasized during the call.

Dive Insight:

Since debuting its Smart Checkout program in June 2022, Couche-Tard has brought the platform to 2,200 stores across North America, and 40% of in-store payments at these sites run through these self-serve stations, Hannasch said during the call.

These stations were developed by checkout technology company Mashgin. The platform uses computer vision to recognize customers’ items once they are placed onto a tray, and automatically rings them up.

Hannasch and Da Silva both noted that Mashgin’s technology not only speeds up the payment process and eases the overall customer experience, but makes life easier for Couche-Tard’s team members, who can focus their efforts on areas beyond checkout. The program has resulted in “great improvement in terms of productivity,” Da Silva said.

“Labor has been a challenge for the industry over the last couple of years,” Hannasch said. “So as that’s stabilized now, our staffing levels are much more normal and overtime is way, way down. So that's significant on the cost side.”

Other convenience retailers that use Mashgin’s technology include Delek US Holdings, which launched the technology in 70 c-stores, and Refuel, which outlined plans to deploy it at 15 of its 200-plus locations.

Hannasch said that Couche-Tard will have a “heavy focus” on automation moving forward with the goal of streamlining operations at the site level. The retailer will have more details to share on its automation journey in October, he noted.

Inside the store, Couche-Tard’s same store merchandise sales in the U.S. grew by 2.1% compared to this time last year, while U.S. merchandise margins saw a 0.4% bump to 34.3% due to a “change in product mix,” according to the company’s earnings report.

Laval, Quebec-based Couche-Tard operates more than 5,700 c-stores in the U.S. It is the second-largest c-store company in North America behind 7-Eleven.