Speaker: John PattonCi l KCircle K

International DirectorCircle K Worldwide FranchiseCircle K Worldwide Franchise

A Division of Alimentation CoucheA Division of Alimentation Couche--TardTard

It’s All About It s All About Satisfying Satisfying

Customer NeedsCustomer Needs

Thursday, May 07, 2009

Today’s DiscussionToday s DiscussionAn Introduction - Who We Are

Alimentation CoucheAlimentation Couche--Tard Tard

An Introduction Who We Are

Circle KCircle K

Keys to Successful RetailingI t StI t StImpact StoresImpact Stores

Category ManagementCategory Managementg y gg y g

IT Data Capture SolutionsIT Data Capture Solutions

Effective Distribution SystemEffective Distribution System

Alimentation Couche-TardAlimentation Couche Tard

8

Company Highlights9,413 stores including 3,617 which sell motor fuel

Company Highlights9,413 stores including 3,617 which sell motor fuel

Well recognized banners including Couche-Tard, Circle K and Mac’s

2,550 stores in Canada and 3,203 in the United States and 3,660 Franchised stores outside of North A i i Chi H K M J America, in China, Hong Kong, Macau, Japan, Indonesia, Guam and Mexico

Over 46 000 employees working in the networkOver 46,000 employees working in the network

15 Billion US dollars in sales turnover

EBIDA 485 MMEBIDA 485 MM

Net Profit of 189 MM

North American Footprintv

v

CENTRAL CANADACorporate stores: 586Affiliated stores: 207

WESTERN CANADACorporate stores: 290Affiliated stores: 0

WEST COAST REGIONCorporate stores: 175

EASTERN CANADACorporate stores: 624Affiliated stores: 336

GREAT LAKES REGIONCorporate stores: 426Affiliated stores: 40

MIDWEST REGIONCorporate stores: 430

Affiliated stores: 303

pAffiliated stores: 36

SOUTHEAST REGIONCorporate stores: 263Affiliated stores: 7ARIZONA REGION

SOUTHWEST REGIONCorporate stores: 228Affiliated stores: 105

Corporate stores: 577Affiliated stores: 21

FLORIDA REGION Corporate stores: 413Affiliated stores: 0

GULF REGIONCorporate stores: 280Affiliated stores: 1

WEST COASTCaliforniaHawaiiOregonWashington

ARIZONAArizonaNevadaUtah

FLORIDAFlorida

SOUTHEASTAlabamaGeorgiaNorth Carolina South Caroline

MIDWESTIllinoisIndianaIowaKentucky

GREAT LAKESIndianaKentuckyMaineMassachusetts

GULFAlabamaArkansasLouisianaMississippi

SOUTHWESTColoradoKansasMissouriNew Mexico

10

Washington South Caroline Tennessee

KentuckyMichiganMissouriOhio

MassachusettsMichiganNew HampshireOhioPennsylvaniaVermont

MississippiFlorida PanhandleTennessee

New MexicoOklahomaTexas

Industry Recognition

11

12

Circle KA brief history

1951

Founded in 1951 with the purchase of three Kay’s convenience Kay s convenience stores in El Paso, Texas.

International Presence

3,712 Sites

MexicoChina

Japan

3,712 Sites

108Mexico p

136108 2,907

Macau / ZhuhaiVietnam

5Macau / Zhuhai 522

12Hong Kong Guam

290232

12

Indonesia

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Franchise Recognized in Recognized in 2008 & 2009 2008 & 2009 Franchise

Recognition2008 & 2009 2008 & 2009 by the highly by the highly

regarded regarded E t E t Entrepreneur Entrepreneur

and and Franchise Franchise

TimesTimespublications publications

as a as a Leading Leading GlobalGlobal

F hi F hi Franchise Franchise Program Program

Franchise TimesFranchise Times Franchise TimesFranchise Times, , October 2008October 2008

Entrepreneur Magazine, Magazine, January 2009

Global Lifestyles are changing…

More shopping optionsMore shopping optionsShoppers are loyal to

brands only if they brands only if they simplify their life & budgetbudget

Demand real valueDemand higher quality Demand higher quality

and service

Satisfying Customer NeedsSatisfying Customer NeedsFour Critical Elements

Impact StoreConcept

Impact StoreConcept

CategoryManagement

CategoryManagementConceptConcept ManagementManagement

Efficient Distribution

Efficient Distribution

State-of-the-Art

IT System

State-of-the-Art

IT System DistributionDistributionIT SystemIT System

Project Impactj p

Impact StoreConcept

Impact StoreConceptpp

reateaaaa

customer experiencecustomer experience

Project ImpactProject Impact

1. A destination • A meeting place

Our main merchandising

d k ti t tand marketing strategy

DDiiffffeerreennttiiaattiioonnDDiiffffeerreennttiiaattiioonnto increase sales & margins

to reduce reliance on tobacco products and gasoline

The end of the “cookieThe end of the “cookie--cutter” storecutter” store

Project Impact Project Impact

Traditionalconvenience

stored t

FoodserviceOil products

MultiMulti--service offeringservice offeringproducts

p

FinancialOther products

IMPACTIMPACTConcepts Concepts

productsp

and services

Customerservice

Co-brandingservice

Proprietarybrands

g

Price Optimization strategies

Micro-marketmerchandising

product mix

Creativepromotionalcampaigns

Store designStore design

United StatesUnited States

GuamGuam

ChinaChina

Hong KongHong Kong

VietnamVietnam

Macau/ZhuhaiMacau/Zhuhai

Proprietary Proprietary Products

Co-Branding Co Branding with fuel

companies

Co-Branding Co Branding with quick serve

restaurants

Fun PromotionsFun Promotions

Category g yManagement

Our approach toOur approach tomeeting

shoppers’needsneeds

Retailer / Supplier/ ppCollaboration

Mr. Supplier Mr. Retailer

Category Managementg y gat Circle K

Right ProductsThe

ability to

g

Ri ht P iability to

offer:Right Price

Right Placement

Right Promotions

Consistent, Repeatable Process

Key Benefits of Category y f f g yManagement

Improved SalesMeasurableBenefits

Improved Gross profit

Improved Inventory Turns

Improved Total Shopper

p y

p ppExperience

Innovation

Category Management Processg y gStep 2 Step 1 Step 3 Step 5Step 4 Step 6p

CategoryRolesSelect

Category & Supplier

pAnalyze

PerformanceInnovation

Process

pCommunicate& Implement

p

The Plan

p 6

Review&

Evaluate

Advisor Category Definition

Plan

InputsInputs InputsInputs InputsInputspShopper InsightCircle K Prioritization

pSupplierQuestionnaireConsumer/

shopperResearch

pBecomesa Part of Everyone'sJob

pEnhancedTemplatesShopper/ Consumer

Research

pTraining &Communication

Strategy forAllParties

p

CategoryMissionStatementRequiredResearch

Innovation Research

Research PartiesRequired

Developp

Retail Positioning StrategyRetail Positioning Strategy

Retail PositioninggRetail Positioning defines Circle K by answering the following questions:answering the following questions:

Who are our current and potential customers?

Where do we compete and against whom?

What do our shoppers need?

What is our value proposition?

How do we position and communicate Circle K?

What are the operations and merchandising guidelines?

Why We Need yRetail Positioning

Creates a shared vision of how things get doneCreates a shared vision of how things get done

Provides guidelines for consistent decision makingProvides guidelines for consistent decision making

Ensures Circle K is presented in the same way across all Channels of Trade across all Channels of Trade

i d f iliRequired to facilitate category management, strategic and tactical planning, store design, etc.

Key Key Principlesp

Key Principlesy pMeeting shopper needs is key to effective

Category ManagementCategory Management

SHOPPER FOCUS

BUSINESS STORE CATEGORY PERFORMANCE

Who is the shopper?

SalesMarginT ti i

MEASUREMENT

What do they buy?

Why do they buy?

How do they buy?"THE

SHOPPER"

Transaction sizeShare of categoryLoyaltyVisit frequency

When do they buy?

Where do they buy?

$ How much do they buy?

Visit frequency

CUSTOMERSATISFACTION$ How much do they buy? SATISFACTION

State-of-the-ArtIT SystemIT System

SYSTEMSMISSION SYSTEMSMISSION

VISION

STRATEGYSTRATEGY

PRINCIPLES

Circle K Adds Value through

T t ll I t t d S tTotally Integrated Systems

fPoint-of-SaleSystems

Back OfficeManagement

Systems

HeadquartersManagement

Systems

DecisionSupportSystemsy

“Consumer to CEO” fully integrated Convenience y gStore/Petroleum solution.

Totally Integrated SystemsTotally Integrated Systems

Headquarters

Middle Management

CashiersPOS scanning sales center

easy use, training, customer servicey , g,

EfficientDi t ib tiDistribution

The Supplier RelationshipThe Supplier Relationship

Competing against a M k L dMarket Leader

Competitiveness of the Whole Supply p pp yChain is as Important

Suppliers as Partners & Enablers

Investing in Right Technology –for Efficiency and Knowledge

Pull Chain vs. Push Chain

Accounting and Finance Reporting

Supplierp g

< EPOS

Distribution Center

< EPOSCenter

< EPOS

Corporate HeadquartersInformation HubSupplier

< EPOSInformation Hub

Decision Support System

ManagementOperations

Purchasing

North AmericanNorth American

Distribution Center

Indonesian DistributionIndonesian Distribution

Indonesian DistributionIndonesian Distribution

Impact Store Store Concept

A store designed to say, “Welcome!”say, Welcome!

Product management that meets consumer needs

Category Category ManagementManagementManagementManagement

Integration Integration of store systems

StateState--ofof--thethe--Art IT Art IT SystemSystem

Efficient Efficient DistributionDistributionDistributionDistribution

Pull Chain vs. Push Chain

Category Management

Impact Store Concept

State-of-the-Art IT S t

Efficient DistributionSystem Distribution