Thought leadership: the future of convenience retail

Dan Munford, managing director of Insight; Christian Warning, managing director The Retail Marketeers; and Magnar Moekkelgard, consultant at NACS, discussed the impact of electric vehicles and foodservice developments with Mark Wohltman, director NACS Europe, at the NACS Convenience Summit Europe

Despite Norway’s target for 100% EVs by 2025, their impact on thwconvenience and forecourt market will be more focused on the recharging aspect than the alternative fuel type, according to Moekkelgard. “EVs will drive shorter distances than regular cars used by commuters. It’s not about what you put into the car but when you do it - currently 70% of all charging takes place at home, 15% during a break and 15% on the road,” he said.

For Warning, take up of EVs in Germany is low and likely to be hindered by apartment-style living and the lack of car parking spaces to enable the recharging. Instead, the trend is to more car sharing options plus bikes. Warning said. However, regulation will drive the market and Germany’s car manufacturers are becoming more active in this sector, especially as China is an important market, he added. Munford said the future was impossible to predict but he encouraged delegates to visit markets and retailers where technology such as EV is already taking off. “One of the secrets is to go and learn from the retailers where it’s happening first. You can see it developing in some markets such as Norway where 48% of car production is EV or hybrid. That’s going to be useful because EV is going to be a percentage of the market everywhere.”

And, while other markets won’t have the natural advantages of Norway in terms of its wind and hydro energy supply, Munford said he expected EV take up to be led by major conurbations. “The political powers to change this won’t necessarily be led by national governments but by cities and EV will happen relatively quickly in those cities,” he claimed.

All the panelists agreed on the growing importance of foodservice for convenience and forecourt retailers. But one size does not fit all, said Warning. The density of supermarket locations in Germany meant convenience stores on forecourt locations were less viable than in the UK, for example. However, there is still a need for foodservice and providing solutions for people on the move.

Moekkelgard asserted that shopper frequency today is being built in the convenience store and not on the forecourt. “We need to increase that frequency then filling at the forecourt becomes an extra bonus,” he said.

Munford highlighted the opportunity for large sites featuring food courts and convenience malls that are developing on the global stage. Here it is fundamental to have a very strong foodservice offer, he said. “The big challenge for retailers is not to create a foodservice offer but a number of foodservice offers and whether they develop their own or work with brands.” Munford highlighted Euro Garages as a business that has reinvented foodservice through large sites and working with major brands and Rutter’s in the US, which is opening much larger sites but specialises in an own brand foodservice offer.

“They are both very different businesses to anything we have seen in previous decades for the convenience industry,” Munford said.

Wohltmann asked the panel how c-stores may look in future and the role technology would play.

Munford argued it was really hard to look at the capabilities of technology and understand what it means for retail. Instead he recommended retailers look to their customers, like Simply Fresh and its university store, to understand what they are looking for and then adapt accordingly.

Moekkelgard also recommended convenience stores give customers what they want and fast; while Warning suggested technology would be deployed to push processes, such as in-store ordering, towards the customer via terminals etc. These types of solutions enable a grab and go self service offer, he said. Technology can also help to support the store staff in terms of new rules and regulations in areas like labelling, for instance, so that people who work in a store can focus on the right things, Warning added.

The panelists considered how store design will play a bigger role in changing consumer perceptions of the offer. According to Munford, this is especially true for the larger sites and he credited Applegreen for leading the way in that respect. “All the branding in terms of store design, staff uniforms and training becomes critical if you moving into a new area because you have to change the perception,” he argued. For Moekkelgard, however, architecture is there to help retailers sell merchandise but the product should be the star. However, he agreed on the importance of creating authority in a particular offer and that new techniques were required for foodservice. “You also need places for people to sit,” he added.

The panel wrapped up their discussion by naming the retailers they thought would be future winners. For Warning it is the discounters Aldi and Lidl. “They have enough power to grab cake from the convenience industry,” he said. For Munford, future winners will be smaller players, those with a specialist focus and advantage, who are also agile and fleet of foot. At the other end of the spectrum, it is big retailers like Shell and Euro Garages, companies who have created new brand propositions, who will succeed. “It will be difficult to cope with disruption unless you are big business,” Munford concluded.

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Fiona BriggsFiona Briggs Freelance retail business journalist

Fiona is an experienced journalist and editor, writing exclusive content for GCSF. She is founder of retailtimes.co.uk. She contributes regularly to NACS Magazine and writes articles on omnichannel shopper trends for Radial. Fiona is available for commissions at fionalbriggs@gmail.com

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