Imagine you’re the CEO of an $8B convenience global retail chain with approximately 9,300 c-stores in North America – 7,100 in the United States and 2,100 in Canada – for a worldwide total network of 14,200 stores.
As the CEO, you want to maximize sales at each store, and you want to provide customers with additional services like ordering everyday essentials online and food for delivery to the home.
Which of the following strategies do you choose?
1. Acquire Grubhub so customers can order everyday essentials and food for delivery.
2. Partner with DoorDash, Uber Eats, Grubhub or other 3rd party food delivery companies.
3. Invest $25M into an unknown startup named Food Rocket, a rapid delivery company ran by a team from Russia with no experience operating in Canada or the USA.
Cue the Jeopardy music.
If you’re the CEO of Alimentation Couche-Tard, you choose option 3. Arguably the worst possible choice. Note: Other executives at the company made the recommendation to the CEO. Those executives didn’t know what they were doing.
The partnership between Food Rocket and Couche-Tard had disaster written all over it. The majority of rapid grocery delivery companies had already failed by the time Couche-Tard and Food Rocket signed their partnership. However, Food Rocket claimed that they were different as they would use inventory provided by Circle K. It didn’t matter. Food Rocket still operated exactly as other quick commerce companies in terms of fulfilling and delivering orders.
The announcement that Food Rocket has shut down isn’t a surprise to me. The founder of Food Rocket and other team members frequently reached out to me for advice. I like the founder and team, and I understood how hard they were working.
I warned executives at Circle K that they had made a mistake in selecting Food Rocket, and that they needed to pivot and consider acquiring Grubhub or partnering with DoorDash and other companies. I was told, “Food Rocket is an exceptional company. They have tremendous potential to reimagine delivery for Circle K.” When I asked the executives to give me specifics on why they believed that, not one could do so. As I stated earlier, the team at Couche-Tard that made the decision to invest in Food Rocket didn’t know what they were doing, and they should never have been given the responsibility to identify a delivery solution for the company.
With the closure of Food Rocket, Couche-Tard looks foolish and now they’re back to square one. What’s next? It’s simple – contact DoorDash and ask them to design a solution for delivering everyday essential items and food to customers.
What about acquiring Grubhub? The company doesn’t have the right executive team to make such an acquisition work.
Partnering with Fulfill Solutions, Instacart, Uber, HelloFresh, Temu, Deliveroo or Attabotics Inc. should be assessed.
