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May 31, 2012
Coinstar plans to expand its Redbox video rental kiosk business into Canada starting in the second quarter of 2012. The company has signed contracts with Walmart Canada, which has about 300 stores, and Couche-Tard, a leading convenience store chain with some 1,200 locations under the 'Mac's' brand. Coinstar plans to begin rolling out Redbox kiosks to those retailers in June in the Toronto and Vancouver areas, expanding to other regions later in 2012 and beyond. Kaplan said the company sees the potential to deploy Redbox kiosks to between 2,000 and 2,500 retail locations in Canada over the next couple of years, many with retailers with which it has existing relationships.
The expansion of Redbox to Canada is a natural move for Coinstar. For one thing, the company is running out of opportunities for continued growth in the US and Canada has plenty of room for Redbox to expand over the next few years. The second major factor is the decline of that country's traditional in-store market, especially in the face of Blockbuster Canada and Rogers Video exiting the business. With Canada's in-store rentals severely diminished and only minor video rental kiosk and by-mail disc rental service penetration, Redbox looks to have a fairly clear path to achieving a strong market position in a relatively short period of time. The company is "prepared to out-execute its [kiosk] competition", which currently includes Zip.ca with kiosks at Food Basics, Metro and Sobeys stores in Ontario and Nova Scotia and Best Buy Canada with locations at 7-Eleven, Mac's and Price Smart stores in Alberta, British Columbia, Manitoba and Saskatchewan.
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