The Convenience Store Showdown: Couche-Tard's Ambitions and the Future of U.S. Tobacco Sales

Canada's Alimentation Couche-Tard is eyeing a takeover of Seven & i, the owner of 7-Eleven. This merger could reshape U.S. tobacco sales, granting Couche-Tard significant negotiating power. However, challenges from illegal vapes and cheaper cigarette brands, along with a declining cigarette market, pose potential roadblocks.

Alimentation Couche-Tard recently renewed its interest in acquiring Seven & i, the parent company of 7-Eleven, aiming to consolidate its position in the U.S. tobacco market. If successful, the merger would create an unprecedented retail force with vast influence over cigarette and nicotine product pricing.

However, the tobacco industry faces several pressing challenges. The traditional cigarette market is dwindling, forcing retailers to seek growth in alternative nicotine products like ZYN pouches and vapes. Furthermore, the prevalence of illegal flavored vapes and deep-discount cigarette brands could undermine the combined chain's profitability.

Experts suggest that larger stores may leverage their retail dominance to secure favorable terms from tobacco companies. Meanwhile, competition from independent retailers and online nicotine distributors continues to intensify, reshaping the market landscape in unpredictable ways.

(With inputs from agencies.)