NACS held its second annual Insight Convenience Summit – Europe, which commenced in Berlin on June 7 and concluded in London on June 12. Convenience World brings you highlights of the summit, which brings together convenience and fuel retailing industry professionals to discuss new ideas and gain new commercial connections.
Retail tours provide a valuable look at Germany’s competing channels
Sharing insights from the first few days of the summit in Berlin, NACS Vice-President of Member Services Michael Davis said the city was chosen because of its role as the home of retail “hard discounting”, led by ALDI and Lidl.
Attendees had the opportunity to visit ALDI and Lidl stores as part of the Retail Study Tours portion of the summit. Highlights included visiting one of Total’s sites, which sells alternative fuel products, including hydrogen. The retailer is part of The Clean Energy Partnership, which is claimed to be one of the most important international projects to test hydrogen as a fuel. Attendees learnt about the evolution of hydrogen fuel first-hand from Total Executive Carsten Retzke.
“Gaining an increased understanding of the future of motor fuels is one of the reasons we came to Berlin on the first leg of the summit,” Mr Davis said.
To experience channel blurring, attendees visited Berlin bakeries, which are, in essence, delicatessens that sell high-quality sandwiches, pizzas, pretzels and pastries alongside hot and cold beverages.
“Bakeries have become a big part of the blurred ‘convenient’ channel in Berlin,” Mr Davis said.
How to prosper in foodservice
Following Berlin, the summit moved to London for two full days of general sessions and a day of Retail Study Tours, in addition to the presentation of the International Convenience Retail Awards. Tactics to prosper in foodservice were put under the spotlight, with attendees at the opening session hearing from leading forecourt retailers Applegreen and Euro Garages, as well as XS Foodservice & Marketing Solutions.
Applegreen UK Managing Director Michael O’Loughlin highlighted the importance of the food offer to his business, in which 60 per cent of the profits are derived from non-fuel.
Euro Garages Commercial Director Ilyas Munshi said they are trying to create an experience that challenges the stereotypical view of the gas station.
“We are aiming for the ‘wow’ factor and have integrated branded food outlets onto our sites, which has created a business that is cash-generative,” he said.
Mr Munshi said foodservice has changed the nature of its sites. People now use the locations for meetings, benefitting from free parking and wi-fi, while fuel has even become an “afterthought” for customers. Mr Munshi revealed 76 per cent of customers buy fuel and food, 20 per cent buy just fuel and four per cent buy just non-fuel.
XS Foodservice & Marketing Solutions Principal Joe Chiovera said the key is to build off a solid foundation.
“Too often, operators jump right to sales and start measuring,” he said. “If you take care of the foundation and then the positioning, sales will happen.”
Discounters a threat to convenience retail
Also in London, NACS hosted a panel discussion on the challenges and opportunities presented by discount retailers. According to leading retailers, hard discounters are a threat to the convenience operating model, with stores needing to keep on their toes.
Interviewed by NACS President and CEO Henry Armour, as part of the Retailer Roundtable, Musgrave Group CEO Chris Martin said discounters were a permanent fixture and had become mainstream. The observation was echoed by Marks & Spencer Head of Food Business Development and International Jill Bruce, who revealed their shoppers are now also shopping at ALDI and Lidl.
“We have to be aware what’s in their total basket and their impact on us,” she said.
Mr Martin added that while convenience has been somewhat “immunised” until now, retailers should not be complacent.
“The price premium convenience could carry due to its location has certainly diminished because of the reference point of the discounters,” he said.
Discounters have also been successful at developing their own brands, which will cause competitors to have another look at their own ’good, better, best‘ propositions. Mr Martin said retailers would need to evolve their own brands in order to “attack the discounters” in future.
At the awards dinner on June 11, Reitan Convenience AS CEO Magnus Reitan was named the 2015 NACS Insight European Convenience Industry Leader of the Year. As the winner, Mr Reitan delivered the keynote address at the summit, sharing his company’s core business principles and the key trends impacting the industry.
Musgrave Group was awarded the 2015 NACS Insight European Sustainability Retailer of the Year. The award recognises Cork, Ireland-based Musgrave Group for its leadership in sustainable resource strategies and inspiring other businesses to implement sustainability initiatives of their own.
SPAR UK was awarded the 2015 NACS Insight European Technology Implementation Award in recognition of its excellence in the implementation of innovative IT solutions in the convenience retailing industry.
Topaz was awarded International Convenience Retailer of the Year for its Re.Store convenience forecourt concept.
Since 2009, the NACS Insight International Convenience Retailer of the Year Award has recognised excellence in convenience and forecourt retailing. Retailers are judged across key criteria, including format innovation, range, people development, customer service initiatives, corporate social responsibility, technology and results.
With more than 330 locations, Topaz is Ireland’s largest fuel and convenience brand. Since opening six months ago, food accounts for a significant portion of Re.Store’s sales. Customers can choose from a variety of fresh options such as salads and sandwiches, as well as gluten-free food and protein-rich porridge pots.
