Canadian convenience group Alimentation Couche-Tard, which operates Circle K convenience stores in the US, said third quarter profit fell 20% due to tough competition hitting petrol sales.

Net income dropped to US$43.7m, or $0.21 per share, down from $54.5m, or $0.26 per share last year. The Laval, Quebec-based company said revenue increased by 19% in the quarter, to $3.5bn.

Acquisitions accounted for about 70% of third-quarter sales growth, the company said. The company acquired 260 outlets in the quarter and opened and revamped another 127.

Average profit from gasoline dropped to US13.2¢ from US17.6¢ a year earlier as competition intensified. About two-thirds of the company's 5,360 convenience stores have gas stations. Couche-Tard said gasoline represented 61% of total sales in the quarter.

"As we did in the first and second quarters of the current fiscal year, we substantially improved our merchandise and service gross margins, driven primarily by better purchasing conditions, our product mix strategy and our IMPACT programme which is now implemented in more than 49% of our company-operated stores," Bouchard, chairman, president and CEO, commented. "However, retail pump prices declined sharply in the third quarter, and our motor fuel gross margin decreased substantially in the United States and to a lesser extent in Canada."