Circle K

Circle K Stores, Inc.
Wholly owned subsidiary
Industry Retail (Convenience stores)
Founded El Paso, Texas (1951)
Founder Fred Hervey
Headquarters Tempe, Arizona, U.S.
Number of locations
 10,000+
Area served
 United States, Canada, Guam, Norway (from 2016),[1], Sweden, Japan, China, Hong Kong, Macau, Vietnam, Indonesia, Philippines, Denmark, Malaysia, United Arab Emirates, Costa Rica, Honduras and Mexico
Parent Alimentation Couche-Tard
Website www.circlek.com USA/Canada[2]
Circle K Kawada shop (Higashi-Osaka Japan)
Circle K in Hong Kong

Circle K is an international chain of convenience stores, founded in 1951 in El Paso, Texas, United States. It is owned and operated by the Canadian-based Alimentation Couche-Tard. It is the owner of the Mexican stores "Tiendas Extra" created by Modelo Group.

Overview

Since the 1980s, Circle K has been the largest company-owned convenience-store chain (i.e. of non-franchised stores) in the U.S.[3][4] It was second in overall number of U.S. stores to 7-Eleven.[3] However, by 1989, it faced strong competition from convenience stores owned by oil companies, and Circle K declared bankruptcy in 1990.[3] By July 2010, Circle K had dropped to fourth rank in number of stores (3,455), then behind BP (4,730 stores) and Shell (4,630 convenience stores).[4]

Some Circle K stores operate gasoline pumps selling Union 76-branded motor fuels; others sell Mobil, Marathon, Phillips 66, Irving, BP, Sunoco or Shell-branded fuel. Until mid-2006, nearly all Circle K stores in South Texas sold Citgo-branded fuel; however, those stores have dropped the Circle K name and now operate as Stripes Convenience Stores and are served by Valero-branded fuel. Circle K stores in northeast Ohio vary depending upon what stores they used to be: the majority are former Citgo/Holland Oil,[5] whose gas is branded as Circle K; others are remnants of the Lawson's/Dairy Mart chain, which sell gas from other companies (most of them served Marathon Gasoline). Some locations, especially older outlets in the company's core markets of the American Southwest, do not sell gasoline.

The chain operates internationally, branching into Mexico and continents such as Asia. In Hong Kong the store is called OK in reference to the circle around the K. Circle K Hong Kong was founded in 1985 by Li & Fung Retailing (later Fung Retailing) as licensee of the name and now part of Convenience Retail Asia Limited.[6] Circle K currently has 349 locations throughout Hong Kong.

Circle K was previously in the United Kingdom, Canada, Australia, and New Zealand, acting as the food-store portions of many Shell stations. The Circle K brand re-entered the Canadian market in 2008, in connection with Couche-Tard's acquisition of Irving Oil's convenience store network, as discussed below.

The chain is primarily located in the Southern, Western, Southwestern, and Midwestern United States. In recent years, the company has acquired the 90-store Spectrum chain serving Georgia and Alabama,[7] the CFM chain in Missouri, 35 Sterling Dairy locations in Northwest Ohio, and 26 stores under various brands from Chico Enterprises of Morgantown, West Virginia.[8] This all came after the 2005 rebranding of the various Couche-Tard stores (Mac's, Bigfoot, Dairy Mart, and Handy Andy) under the more nationally known Circle K brand.

Circle K started to appear on Long Island in New York in 2013 with a store in Long Beach.

History

Entrepreneur Fred Hervey purchased three Kay's Food Stores in El Paso, Texas, in 1951. Hervey renamed the stores as "Circle K Food Stores, Inc." rather than "Kay". He grew the Circle K chain into neighboring New Mexico and Arizona, which has been the company's home base since 1957 (Hervey would go on to serve two terms as mayor of El Paso).

According to the Circle K website, Circle K grew its retail network through a series of acquisitions conducted during the next few decades, which were incorporated into the Circle K brand. By 1975, there were 1,000 Circle K stores across the US. In 1979, Circle K entered the international market when a licensing agreement established the first Circle K stores in Japan; Circle K stores in Japan are run by the Circle K Sunkus Corporation, which licenses the Circle K brand from Alimentation Couche-Tard. In 1983, the number of stores increased to 2,180 with the purchase of the 960-store UtoteM chain.

The Thirst Buster fountain drink was introduced in 1983. It is one of Circle K's flagship products today. Now known as "Polar Pop" in many areas, Circle K advertises that customers can buy any size for just a single price. The Polar Pop brand is also used at Couche-Tard-branded stores.

Karl Eller, a prominent Phoenix businessman, served as the company's CEO from 1983 to 1990. During that time, Eller built Circle K into the second largest convenience store operation and the largest publicly owned convenience store chain in the U.S. with 4,631 stores in 32 states and an additional 1,300 or so licensed or joint venture stores in 13 foreign countries. Under Eller's leadership, the company grew from annual sales of $747 million to over $3 billion.

In 1988, the company sent a letter to its over 8,000 employees announcing that it will cut off the medical coverage of those who become sick or injured as a result of AIDS, alcohol, drug abuse or self-inflicted wounds. The company stated that There are certain lifestyle decisions that we are just not going to assure the results of. [9]

Fortunes declined in the late 1980s as the US economy began to slow down, and Circle K filed for Chapter 11 bankruptcy protection in May 1990; Eller resigned as CEO. Some underperforming locations were sold or closed. In 1993 the company was purchased by Investcorp, an international investment group, and emerged from bankruptcy.

In 1996, Circle K was acquired by Tosco Corporation, an independent petroleum refiner and marketer, but kept its headquarters in Phoenix. Tosco was purchased in 2001 by Phillips Petroleum, which in 2002 merged with Conoco to form ConocoPhillips. In 2003, Circle K was purchased by Alimentation Couche-Tard (a large convenience store operator based in the Montreal area) for US$804 million.

In 2005, Taiwan's OK Convenience Store chain terminated its franchise agreement with Circle K.[10]

In mid-2006, Alimentation Couche-Tard entered into a franchising agreement with ConocoPhillips to brand some of its company-owned stores as Circle K, in the western portion of the US. ConocoPhillips remodeled the stores into the Circle K scheme but continued to operate them. The stores continued to have the new ConocoPhillips unified canopy design and ProClean gasolines. These stores were spun off as Phillips 66 in May 2012.

Another oil company, Canada-based Irving Oil, leased out its convenience stores operating under the Bluecanoe and Mainway banners in the United States and Atlantic Canada to Couche-Tard, which rebranded the locations to Circle K in July 2008, while still selling Irving-branded fuel. However, the Mainways in Newfoundland and Labrador did not change until summer 2010. The parties had earlier formed a similar partnership in Quebec, with the stores there operated as Couche-Tard.

In April 2009, ExxonMobil sold 43 Phoenix, Arizona stores to parent company Couche-Tard as part of a sale of the larger On the Run franchise. These 43 stores are to be rebranded under the Circle K name.[11]

In July 2010, Circle K had dropped down to fourth rank in number of stores (3,455), behind 7-Eleven (6,523 stores), BP (4,730 stores) and Shell (4,630 convenience stores) in 2010.[4]

On February 10, 2014 Modelo Group Sold the Tiendas Extra brand of stores to the Mexican franchise of Circle K, Circulo K.

On December 18, 2014, Couche-Tard announced its acquisition of The Pantry. for $860 million all-cash tender. The acquisition is expected to close in March 2015. Following the closing, all stores that were owned and operated by The Pantry, many of them under the "Kangaroo Express" name, are expected to be rebranded under the Circle K banner.[12]

On August 12, 2015 Circle K will open its first five convenience stores in Costa Rica, Central America after having bought and rebranded the local convenience store chain Delimart.

On September 23, 2015, Alimentation Couche-Tard unveiled a refreshed brand identity for Circle K, and announced that the Statoil (Scandinavia, and Central and Eastern Europe) and Mac's (Canada) brands will be converted to the Circle K brand by the end of 2017.[13][14]

Frosters and Polar Pops

Fountain drinks at Circle K are sold in Polar Pop cups, and most locations offer any size for under one dollar, plus tax. Refills cost the same.

Circle K is also the exclusive US home of the Froster, a brand of slush drink.

Sponsorship

Circle K was a part-time primary sponsor of the #28 IndyCar Series racecar driven by Ryan Hunter-Reay of Andretti Autosport between 2011 and 2013. In 2014 it switched to KVSH Racing driver Sébastien Bourdais.

Due to its sizable presence in Greater Cleveland from the former Lawson/Dairy Mart stores, Circle K sponsors the Cleveland Indians strikeout sign in center field at Progressive Field in Cleveland. Every time the Indians pitcher records a strikeout, a fan flips a sign to add the Circle K logo on the sign, as the strikeout in traditional baseball scorekeeping is the letter "K".

It is also the Strikeout sponsor for the Arizona Diamondbacks. A large display shows a Circle K logo every time a Diamondbacks pitcher records a strikeout. If 10 total strikeouts are obtained in one game, then the entire audience receives a voucher for a free polar pop at Circle K Stores.

See also

References

  1. ↑ ""Bensin-Statoil" døpes om til "Circle K"" (in Norwegian). E24. 22 September 2015. Retrieved 22 November 2015.
  2. ↑ "Accueil dépanneurs Couche-Tard". Couche-tard.com. Retrieved 2012-02-29.
  3. 1 2 3 Financial Accounting, W. Steve Albrecht, Earl K. Stice, James D. Stice, 2007, 723 pages, p.217, webpage: BGoogle-Q62.
  4. 1 2 3 "Top 100 Convenience Stores", Don Longo, CBS News, 26 July 2010, webpage: C53.
  5. ↑ "Holland Oil sold to Canadian company". wkyc.com. 25 August 2006. Retrieved 2012-02-29.
  6. ↑ "About Circle K". Convenience Retail Asia. Retrieved October 4, 2015.
  7. ↑ "Couche-Tard acquires Spectrum Stores a 90 store chain in the Southeast Region (U.S.)". PR Newswire. April 11, 2006.
  8. ↑ "Circle K Acquires 26 Stores in Three States - Business Focus - Convenience Store News". Csnews.com. Retrieved 2012-02-29.
  9. ↑ Noble, Kenneth B. (August 6, 1988). "Company Halting Health Plan On Some 'Life Style' Illnesses". The New York Times.
  10. ↑ Amy Chang-Chien Hsueh; Josephine Hsu (2010-06-30). "Taiwan Convenience Stores 2010" (PDF). USDA Foreign Agricultural Service Global Agricultural Information Network. Retrieved 2014-05-17.
  11. ↑ "Couche-Tard Acquires ExxonMobil Franchised On the Run Stores". Convenience Store News. Archived from the original on 30 April 2009.
  12. ↑ "Cary's The Pantry stores sells for $861M to Circle K parent". bizjournals.com. December 18, 2014. Retrieved 18 December 2014.
  13. ↑ "Mac's stores to be renamed Circle K, says owner Couche-Tard". CBC News. September 22, 2015. Retrieved 22 September 2015.
  14. ↑ "Circle K Transformation Goes Beyond Rebranding". CSPNet. Retrieved 25 September 2015.

External links

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