Reitan, the leading Scandinavian convenience retailer, is entering a new partnership with Shell that will extend the 7-Eleven format to forecourts in Norway, Denmark and Sweden.
Reitan already operates 1,500 convenience stores in Scandinavia through its Reitan Servicehandel arm, including the Narvesen, Pressbyran, YX and 7-Eleven retail brands, with total sales of $1.9 billion.
Under the new co-location agreement, 91 YX petrol stations in Norway and 64 YX sites in Denmark will be rebranded as Shell with 7-Eleven convenience stores. In Sweden, 7-Eleven convenience stores will be introduced to 112 Shell petrol stations. The conversions are scheduled for completion by mid-2009.
At the same time, Reitan is developing its 230-strong 7-Eleven chain in the face of growing competition from supermarkets in its core Scandinavian markets.
Speaking at the Insight International Convenience Retailing conference in London last month, Cathrine Stange, marketing director, Reitan Norway, said: “The biggest challenge we face in Scandinavia is everybody is getting into everybody else’s business.”
Stange said that despite operating in urban, high-traffic locations, as well as at airports and train stations, rivals were encroaching. “Supermarkets are moving into those locations and, with their extended opening hours and low prices, are very challenging for us at the moment,” she said.
In response, Stange said Reitan is developing “signature concepts” in food and drink. These include two new serve-over coffee brands – Coffee for Real and Coffee Rosso.
According to Stange, 7-Eleven can now serve a quality cup of coffee within 45 seconds.
“The challenge has been getting the product right and the speed of service,” she said. “In a traditional coffee bar, customers expect to queue up but in our stores you can get almost the same quality coffee without having to queue.”
The company’s fast and fresh food offer, another key department, has also been revamped with new and better quality products, including a chicken hot dog, Go-Go Taquitos and an organic bread range.
Stange told delegates Reitan has successfully promoted exclusive products too. These include Ben & Jerry’s ice cream, 1-litre bottles of Coca-Cola and Innocent smoothies. In addition, the company has teamed up with a local supplier to offer fresh baguettes between 8 am and 1 pm.
Stange reported Reitan is introducing day-part communications in the store with menu boards and electronic screens to promote these lines “There’s potential for further exploration in this area,” she said.
Managing the store space is crucial, added Stange, since the majority of 7-Eleven stores are relatively small – between 60 and 100 square meters.
Stange told delegates about new concepts, including shelving units on wheels to provide flexible merchandising for key products and promotional periods. Window graphics are also being deployed along with interior wall space to promote new lines such as the organic bread offer.
Stange said the results from the pilot stores were positive with sales up 30 percent in the first six to eight months and food service up by 40 percent. Sales at one of the first 7-Eleven/Shell conversions are up by 20 percent in the first month.