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Couche-Tard operates nearly 14,200 stores in 26 countries and territories, with a major presence in the United States, Canada and Europe.Christinne Muschi/Christinne Muschi/The Globe and

Canadian convenience store giant Alimentation Couche-Tard Inc. is facing immense challenges hiring and keeping employees as the retailing sector nervously eyes a COVID-19 resurgence.

The current labour market is “the most difficult” in his 33-year career, Couche-Tard chief executive officer Brian Hannasch told investors and analysts on Wednesday during the company’s first-quarter conference call. Couche-Tard, which owns the Circle K chain, is taking extraordinary steps, such as offering retention bonuses and free cell phones, to attract employees and keep up staffing levels, Mr. Hannasch said.

“I’ve never seen it this intense,” Mr. Hannasch told The Globe and Mail in a separate interview. “It’s very difficult to find people at any level right now. … We’re doing our best to mitigate that, but certainly being short-staffed as society reopens just puts stress on everyone that’s working in our stores.”

Couche-Tard operates nearly 14,200 stores in 26 countries and territories, with a major presence in the United States, Canada and Europe.

The labour shortage is acute in many industries in North America, and the coronavirus pandemic has made it worse. Structural factors such as limited interest in entry-level jobs are mixing with more event-driven causes such as fear of catching COVID-19 and government unemployment support to drive down participation, according to Couche-Tard.

Canada suffers shock economic contraction, casting shadow over recovery

About seven million Americans who could work are now “sitting on the sidelines, for a variety of reasons,” Mr. Hannasch said. The largest operating cost for the company, based in Laval, Que., is labour, at about US$2.9-billion a year.

Couche-Tard has not had to close any stores because of the shortage, although it has cut opening hours at some locations, Mr. Hannasch said. An increase in COVID-19 cases linked to the Delta variant is magnifying the problem and causing supply issues, he said.

For example, one of the company’s main drinking-cup vendors had a COVID-19 outbreak that caused a shortage of cups, lids and straws for Couche-Tard, which is among the biggest retailers of fountain drinks in the U.S., Mr. Hannasch said. A shortage of delivery drivers in many markets has also hurt distribution times.

Although staffing levels are challenged in many regions where Couche-Tard operates, the situation is worst in southern U.S. states such as Texas, Florida and the Carolinas, Mr. Hannasch said. He added that lower vaccination rates in those states are “playing a role” in the labour crunch.

Tennessee, Florida and South Carolina are now U.S. hot spots for COVID-19, with more average new daily cases per population than elsewhere in the country over the past seven days, according to a daily research bulletin published by National Bank of Canada. Couche-Tard is encouraging its employees to get vaccinated, and isn’t ruling out requiring vaccination for workers in the stores, Mr. Hannasch said.

Alex Miller, Couche-Tard’s North American operations chief, told investors in July that over the first four months of this year, the number of individuals applying to work for Couche-Tard dropped by more than half, to the lowest level in company history. Things have improved, and the company has hired 21,000 people globally since April, Mr. Hannasch said.

“In the last 60 to 90 days, we’re hiring more people than we’re losing, and that staffing gap is closing,” Mr. Hannasch said. “So we’re in a better place, but it’s not without a lot of effort and focus. … We’ve not found a silver bullet. It’s just doing a lot of little things.”

Store managers used to hire employees, but the company has enlisted full-time recruiters and ramped up online hiring. Couche-Tard, which spends on average US$1,500 for every new hire, has also rolled out a new assessment tool to predict whether an applicant will be a good fit.

Despite the challenges, the company is performing well financially. Net earnings for the latest quarter ended July 18 came in at US$764.4-million, or 71 cents per share, on revenue of US$13.6-billion. The company is tallying higher profit margins on fuel compared with prepandemic quarters, but over all, it is selling less gasoline than before the pandemic as work-from-home trends continue.

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