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Risks
1. Dependence on energy prices: As a convenience store/gas station operator, Alimentation Couche-Tard’s profitability is heavily dependent on energy prices. Should they rise, it could harm the company’s profitability and margins.
2. Competition: Alimentation Couche-Tard competes against a number of other convenience store and gas station operators, both big (e.g. ExxonMobil, BP, Shell) and small. It is essential for the company to be constantly evolving to stay ahead of the competition.
3. Customer Taste and Preferences: Consumer taste and preferences can change quickly, which could reduce sales of certain product lines at Alimentation Couche-Tard stores.
4. Expanding into New Markets: Expansion into new markets carries the risk of failure due to a lack of familiarity with local conditions and regulations, and competition from existing operators.
5. Financial Risks: Alimentation Couche-Tard has significant debt and financing costs, and failure to manage this properly could affect its profitability.