Norway: leading charge to EV ownership

Magnar Møkkelgård, former vice president at Reitan Convenience, reveals why Norway is leading the charge in electric vehicle ownership and the implications for the forecourt and convenience sector

The NACS Convenience Summit - Europe in June emphasized the importance of keeping ahead of the trends and capturing learnings from global markets which are already ahead of the curve.

For any forecourt and convenience retailers contemplating the trend to Electric Vehicles (EVs) then Norway, which has a target for 100% electric cars being sold by 2025, is the place to start.

Insight is hosting its own study tour to Oslo in September, co-hosted by Magnar Møkkelgård, former vice president at Reitan Convenience. The event will include an overview of the Norwegian convenience market, visits to leading convenience retailers, Reitan Convenience and Circle K, plus a presentation from the Norwegian EV Association, the world’s largest organisation of its type, boasting 50,000 members. Ahead of the tour, Møkkelgård shares his insights on the Norwegian market and, in particular, its key takeaway - EVs. Norway’s adoption of EVs has been accelerating, especially in recent years. In 2016,16% of all new cars were electric. Today, EVs command a 26% share of sales. Combined with the 20% share held by hybrid plug-in vehicles, then almost half of the total market is dominated by some kind of electricity, Møkkelgård says. That makes the Norwegian government’s 2025 target look increasingly achievable.

Adoption of EVs has been both politically and economically motivated, however. “There’s been a lot of subsidies and advantages for drivers of electric cars,” Møkkelgård says.

The Norwegian government has introduced free public charging stations, for example. EVs are exempt from tax. Drivers pay reduced tolls on the highway and commuters can take advantage of bus lanes too.

This has encouraged early adoption but those advantages are slowly being taken away, as a ‘second wave’ of electric car ownership takes hold, Møkkelgård reports. For these consumers and Møkkelgård includes his own daughter, they would not contemplate anything other than electric. “She feels it is more socially sensible to use and just likes it,” he says. “So, while the incentives were very important to start with, in order to get people buying electric cars, by 2024 the cost of producing electric cars is expected to be the same as the cost of producing other cars so most of the advantages that e cars have today will have been taken away.”

The ramifications of the switch to electric for the convenience and forecourt sector are clearly immense and location is going to be key. Møkkelgård quotes the CEO of Reitan Convenience in Norway, who has identified the challenge. “It’s not with what you fill your car but where you fill it,” he says.

In Norway, 70% of all charging is done at home, 15% at work and15% in other locations and there are currently 10,000 public charging points for e cars located at gas stations, supermarkets, DIY stores, fast food outlets and on the high street.

High speed chargers, which can can generate up to 80% capacity in 20-30 minutes, are also being introduced.

On a forecourt with an electric charging facility people will therefore stop for a longer amount of time but they will not necessarily go into the gas station, Møkkelgård reports. Instead they may sit in their car to take phone calls and check emails. If they are hungry or thirsty they may venture into the store, he says.

That makes the convenience offer paramount and the refueling or recharging option an extra bonus or add on.

Retailers are gradually adapting, Møkkelgård adds. Circle K and Reitan Convenience are investing in or tieing with partners on charging. Esso and Shell are further behind, he says, but the trend is undeniable. “In the future if you want to have a gas station type location you will need to provide electric charging facilities.”

On top of the forecourt players, there are disruptors like Tesla, introducing a network of superchargers in Europe on highway locations outside of major cities to target Tesla owners; plus the Ionity alliance of major car manufacturers, which is building a similar network of charging points.

According to Møkkelgård, retailers stand to lose a lot of traffic if they are not located close to these new parks.

Further, 50% of Norway’s total convenience retail market - the forecourt convenience segment - is poised to be impacted by EVs. “The market is very vulnerable to what is going on in the EV business,” Møkkelgård says.

The Norwegian convenience market and indeed, in all three Scandinavian countries, is pretty distinctive, Møkkelgård adds. Unlike the UK, for example, the c-store business is composed of small format stores, rarely larger than 150sq m.

In a similar vein, soft discounters dominate the grocery market including Reitan’s own chain Rema 1000; followed by supermarkets but there are virtually no hypermarkets.

Off the forecourt, Norway’s convenience store business is located in high traffic locations including railway stations, airports, bus stations and the high street.

But while Norway’s forecourt convenience retailers face unique EV challenges versus other global markets, the convenience sector in general is grappling with trends apparent elsewhere too. Those include the decline in traditional traffic driving categories such as tobacco and lottery plus the growth of fast food, coffee and food to go.

“The old traffic generating products ie tobacco and lottery and press are all really stagnating or even dropping,” Møkkelgård reports, “while the trend to grow within food to go is all over the place.”

According to Møkkelgård, fresh food business in convenience has developed over time in Norway, emanating from the launch of hot dogs and bakery products in the nineties.

Today’s consumer is far more demanding, however, and the expectation now is that everything is fresh, he adds. That puts its own pressures on convenience operators and requires new skill sets among retail teams.

As well as EV, Norway has been an early adopter of new technologies like apps for customer marketing and loyalty schemes. Møkkelgård cites Reitan and Circle K as leaders in this field and for their pioneering work with companies such as Liquid Barcodes.

Norway is also ahead in terms of integrated administration systems and concepts like e-learning. “It means that people operating small format stores do not spend too much time in the back room but more time facing the customer,” Møkkelgård explains.

Norway also excels in driving local ownership in small format stores and especially franchise operations, Møkkelgård reports. This type of empowerment enables extremely effective promotions, he adds. With Reitan Convenience, for example, one single 100sq m store holds a record for selling 10,200 bakery items in just one day. “The different franchisees challenge each other as to who could sell the most - it’s all about local ownership and maximising local initiatives,” Møkkelgård concludes.

Learn more about Insight's Oslo tour and book your place here

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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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