NEW YORK/LONDON : A Couche-Tard takeover of 7-Eleven owner Seven & i would position the combined convenience store chain to dominate U.S. cigarette sales and try to push tobacco companies for better prices and promotions – including on fast-growing nicotine pouches like ZYN.
Canada’s Alimentation Couche-Tard remains keen on a buyout after Japan’s Seven & i rejected its acquisition proposal as too low, and it remains unclear if the deal will go ahead. Seven & I has since moved to speed up an overhaul of its business demanded by some investors. It is set to announce quarterly results on October 10.
If the two players were to combine, the new U.S. chain’s size may offer greater bargaining power with cigarette manufacturers like Altria and British American Tobacco. But it would still face a major threat from illegal flavored vapes and deep-discount smokes like Cheyenne that are widely sold at independent smoke shops and bodegas.
The market for U.S. cigarette smokers is declining after decades of warnings about health risks. But it approached nearly $60 billion in sales in the year ended in early September, according to market research firm Circana, and it is crucial to convenience, or c-store, sales.
In addition to health worries, U.S. consumers have moved away from name-brand cigarettes sold in major c-stores like 7-Eleven because of price hikes. The net price for a pack of Marlboros is up nearly 30 per cent to $9.27 from 2019, according to manufacturer Altria. Taxes on heavily-regulated smokes can add further hefty costs per pack.
The potential $38.5 billion deal would more than double Couche-Tard’s U.S. store footprint – through its Circle K shops – to almost 20,000, adding 12,601 7-Elevens, according to 2023 numbers from the National Association of Convenience Stores, a trade group. The shops are usually attached to gas stations.
Circle K and