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PetrolPlaza Special: Trends and challenges of Norway's market

Norway's fuel retailing industry is currently undergoing major changes. Today there are approximately 1,200 full service gas stations in Norway, in addition to nearly 400 automated filling stations. We speak to Frank Williksen, a Norwegian journalist who specializes in the motoring industry, about trends and challenges in the market.



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Frank Williksen has been writing about cars, motors and traffic since 1966. He is the editor of Nytt om Bil, a portal with news on the car industry, and owner of Williksen Foral, a publication and PR service company.

Currently, what are the biggest trends in the Norwegian fuel retailing market?

The role of fast food, hot and cold, is becoming more and more important. Most chains spend a lot of money and effort developing new and more exciting dishes and products. However, hot dogs and burgers still lead the sector, with a growing interest for baguettes of different sorts. Coffee deals are a ‘must have’ in some of the biggest chains. Norwegians are heavy coffee drinkers.

For many service stations, car wash services are a very important source of income. Another typical trend in Norway is a growing number of charging points for electric vehicles at gas stations. This is, of course, due to the fast growing number of EVs in the country.

Other than the change in the food offering, what changes have there been in the products being sold at forecourts?

There has certainly been a change in product range offered in the gas station stores. Just a few years ago, a lot of stations had a significant turnover on groceries, in many cases because they opened for longer hours than the classic grocery stores.  Now those big convenience stores have also started to open more hours, in some cases until 23:00 or longer.

We also see that the former assortment of DVDs and music CD’s have been substituted by cell phone equipment, audiobooks and betting shops. More and more gas stations have also dropped selling magazines.

Scandinavia as a whole, with Sweden and Finland more specifically, has made a big bet on biofuels and other alternatives. How is this trend developing in the country? What are the objectives and what expectations do you have for the future?

The biofuel situation is not quite the same in Norway as it is, for instance, in Sweden and Finland. Biofuels are available, but it does not seem to be a very “hot” topic at the moment. It is different for trucks, as most important truck manufacturers now have approved the use of HVO for most of their range.

Other than that, I expect the sale of electric vehicles to remain high in Norway. There is also a growing interest for hybrid vehicles. These will sell well, at least in the short term (2-4 years).

After this – or even earlier – I expect Hydrogen cars to increase their sales, with Hyundai and Toyota already in the dealer showrooms. A major help to promote the interest in this alternative fuel source is that the YX chain plans to open 20 hydrogen filling stations available within the 3 to 4 years.

Norway will be witnessing a major overhaul of its current gas station network with big changes happening in Statoil (the Circle K rebranding), Deli de Luca taking over the Esso stations, and St1 Nordic Oy taking over the Shell assets. Why have such big changes happened at the same time and how will this shape up the country´s fuel retailing industry?

Indeed, big changes are happening in the so called downstream part of the oil business here in Norway. The big oil companies are leaving the road service business and other retail branches are coming in, starting with the Couche Tard acquisition of Statoil Fuel and Retail a few years ago. This has been followed by the St1 Nordic Oy takeover of Shell stations, while Deli de Luca is investing Esso.

To me, it seems like the oil companies wish to concentrate on their core business: exploration and production of oil and oil products. Why it happens so simultaneously is, I think, more of a coincidence.

My guess is that the result of these changes will be more and more shops, and a diminishing interest for car service. Instead of having gas stations with a limited choice of food, chocolate, papers etc., we will have bigger and more attractive shops with gas pumps on the outside.

In the context of volatile oil prices and how fast things are changing in the industry, what would you say are the biggest challenges facing the industry?

I think the hesitation towards adapting to new types of energy, and the need for supplying these, is a big challenge. Luckily, more and more gas stations now install charging equipment for electric vehicles – it is about time. Major grocery chains have already done this a few years ago (KIWI, McDonalds, etc.).

Another great challenge for fuel retailers is the big chains of grocery stores. These chains have expanded their opening hours during recent years, and they have started to sell a few products which were typically offered at gas stations, competing heavily on price. Now they are hoping for admission to keep their shops fully open on Sundays too, which would represent a blow for gas station operators. 

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