This article published September 2016. For latest news THIS MONTH'S ISSUE


Danish market report: There is something new in the state of Denmark

Christian Warning, NACS Insight Representative for the German speaking markets, reports from his Nordic neighbour country Denmark.

Circle K

Alimentation Couche-Tard Inc.; which today oversees one of the world’s largest convenience-store empires, took control of the Statoil Fuels and Retail network of 2,300 service stations in Scandinavia, the Baltic states and Poland in 2012 and this year the European Commission gave Alimentation Couche-Tard the green light to acquire A/S Dansk: Shell's downstream retail business in Denmark as well.

Subsequent to this transaction, Couche-Tard's network in Denmark would include a total of 286 company operated-stores, 153 company-owned and dealer operated and 44 dealer owned and dealer operated. Included therein are 211 unmanned automated sites. Couche-Tard has proposed to divest a mix of both its current sites and Shell-branded stations, including the Shell/7-Eleven network and Shell's dealer-owned network. In addition, Couche-Tard has proposed to divest A/S Dansk Shell's commercial and aviation fuels businesses.

Couche-Tard, through its wholly-owned indirect Danish subsidiary Statoil Fuel & Retail A/S, has signed an agreement for the sale of the divested assets with DCC Holding A/S, a subsidiary of DCC plc. Pending the customary regulatory approvals, this transaction is expected to close during the second half of fiscal 2017. Until approval and completion of this transaction, Couche-Tard and the divested businesses will continue to operate separately.

DCC, one of Europe’s leading energy groups, has acquired the main part of Shell’s Danish downstream activities comprising 205 service stations, Shell’s sale of fuels to the Danish business market and Shell’s sale of aviation fuels to the Danish airports. With the acquisition, DCC enhances its massive presence in the Danish energy market and becomes one of Denmark’s leading suppliers to private households, the business market, airports and the marine industry.

Shell is heavily advertising at all their remaining sites that they will stay in Denmark as the new owner DCC has entered into a long term brand partnership with Shell to operate the network under the Shell brand.

By mid-2018, the entire network of Statoil-branded stations in Europe will be rebranded to Circle K. In August 2016 you’ll already find the Circle K brand across Denmark.

My expectation is that the Circle K market entry will push competitors to re-think their offer to the 5.7m Danish population. Although there have been no major changes yet, the foodservice offer in Denmark’s service stations was already one of the best in Europe.

In a market where over 60% of all sites operate as unmanned, the C-store offer is a key success factor at the remaining manned service stations. The ‘grab & go’, ‘eat for now’ and ‘later’ offers are continuously improving and you’ll find a very attractive combination of made-to-order, fresh foodservice items and an impulse driven, self-service counter for coffee and fresh food items at Circle K.

7-eleven

The 7-Eleven brand, operated by Reitan Convenience in Denmark and throughout Scandinavia is certainly not standing still either. 7-Eleven has recently introduced a wide range of better-for-you foodservice items within their C-stores at Shell forecourts and is leading the convenience grab & go offer from a quality perspective.

Denmark looks somewhat like a blueprint for the customer offer at forecourts in many European markets. In a highly competitive fuels market, within a well-developed convenience market consumers will find attractive, branded, fit-for-purpose unmanned 24/7/365 automated sites and one-stop-shops in iconic retail sites, with a permanently developing service offer.

At the 7-eleven Shell site in Aabenraa, for example: Tesla drivers find a supercharger station with 5 charging facilities, whilst the driver and passengers can relax and enjoy the convenience offer of 7-eleven.

Qvik To Go

Q8 Denmark’s convenience format Qvik To Go is also among the leaders of the European convenience offer at service stations.

They have now partnered with Starbucks to go and are advertising their new coffee offer with above the line media, plus all sites are using their digital screens at the pumps, even at those sites where they have not yet installed the new offer. To utilize the space behind the counter; one arm length from the cashier, Q8 implemented new cooling units for up-selling within the drink category.

A very interesting idea especially for “dark markets” is to make use of the former tobacco merchandising space.

A good example of the Danish fuels retail market is a Q8 site in the countryside, where they give their customers the choice between the high quality Q8 Qvik To Go offer and the F45 unmanned format on the same property, each with two pump islands on the forecourt.

In my opinion and from an industry perspective, they are doing something right in the state of Denmark and I am sure that we will hear and see much more from the country where people love coffee (> 9 kilo avg. per head consumption p.a. vs. 4.5 in the US) and wine (avg. wine consumption higher than in Germany or in the UK) in the future.

Christian Warning, the NACS Insight representative for the German speaking markets reports. To contact Christian Warning, click here.

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Christian WarningChristian Warning Sales and marketing expert

Christian is the founder and managing director of The Retail Marketeers, a Hamburg based agency. Christian is Insight Representative for German Speaking markets. He is a very experienced former senior retailer with wide and senior connections and is also the go-to commentator and analyst on this exciting, changing and growing market. He worked for 13 years for Shell in different management functions, including heading Shell’s billion dollar non-fuels retail business in Germany in his early thirties.

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