Alimentation Couche-Tard (TSX:ATD) has been one of the TSX Index’s biggest winners over the past five years, with an absolutely incredible gain of 92% posted in the timespan. And that’s including the recent correction (which I believe is more than buyable) shares are currently in the midst of. Undoubtedly, Couche-Tard may be in the low-tech business of convenience retail.
However, it’s an industry that could see a lot of dynamic changes over the next five years as various new technologies come to be. From automated checkout to other tech-focused initiatives to enrich the customer experience while removing a bit of friction from the checkout process, I see the convenience retail landscape as ripe for some disruption, not just over the next five years but over the next two decades, as electric vehicles (EVs) gradually take the place of gas-powered cars. Indeed, in markets like Norway, the EV boom has already taken off.
Though it may take America a bit of time to catch up, I think Couche-Tard is ready to meet the needs of future customers. Whether it’s by offering more charging stations or by accelerating efforts to include fresh food and hot meals, I see Couche-Tard changing for the better over the next five years as the firm aims to drive earnings growth even higher.
Image source: Getty Images
Couche-Tard’s next five years could be prosperous
Of course, doubling earnings becomes more challenging as a larger $73.2 billion company. However, Couche-Tard’s acquisition track record, I believe, really speaks for itself.
The company doesn’t just make smart deals; management seems to know how to squeeze every bit of synergy from an acquired firm. As more companies brace themselves for the rise of EVs, fresh food, and restaurant-quality meals, I find Couche-Tard stock to be one of the names to stash in a TFSA (Tax-Free Savings Account) and forget you own for the next five years.
Indeed, fresh food has been a boon for Couche-Tard. With exclusive branded merchandise and fresh food expertise, I view ample growth drivers to help Couche-Tard’s stock double over the next five to six years.
Bottom line
For now, the company is doing a fine job of beefing up its exclusive merchandise. It’s also nice to have M&M Meat Shop frozen foods at select Circle K locations. As the firm continues partnering with food and beverage brands, I think there will be a growing number of reasons to head on over to Circle K or Couche-Tard, as it’s still known if you’re from Quebec.
Additionally, Couche-Tard is doing a great job of expanding its fresh food offerings, helping shoppers cut down on those trips to the grocery store. In the coming years, I expect more efforts to be made to bring more fresh food to stores. In the distant future, perhaps Couche-Tard may also be a source of restaurant-quality items, like pizza or even store-made submarines, that really get people moving into stores.
These days, it’s not uncommon to see someone head over to the convenience store for dinner while also picking up some grocery essentials and perhaps some snacks while they wait for their order. The future of Couche-Tard looks bright, and investors should take notice!
