Reitan Servicehandel Expands Presence with Major Re-branding Agreement

Servicing the nation

Reitan Servicehandel has recently signed a significant agreement that will see it expand its presence along the Scandinavian road network

Reitan Servicehandel Sweden, as part of the rapidly growing Reitan Group, has 400 Pressbyrån and 7-Eleven stores based across the country. Serving groceries, fresh food, magazines, confectionary, and a range of other goods, the franchise-based retail business has long been interested in penetrating the oil market that would also perfectly suit the group’s strategy of trying to move its stores onto Norwegian and Danish road networks. So on 10 July 2006, Reitan Servicehandel acquired a total of more than 750 Hydro Texaco service stations, which were later called YX stations.

Over a year later, on the 27 August 2007, Royal Dutch Shell and Reitan Group signed an agreement to re-brand a planned 269 service stations across Norway, Sweden and Denmark. The agreement entails 91 YX service stations in Norway, 66 YX service stations in Denmark and 112 Shell service stations in Sweden undergoing a major re-branding to provide both Shell’s premium fuels and 7-Eleven convenience stores.

The company’s CEO, Johannes Sangnes, comments: “This agreement will give both Shell and Reitan the opportunity to focus on and expand their core business areas across the region. With our Pressbyrån and 7-Eleven outlets, we are highly visible and present in the local town areas but are not present along the highways, so this is a positive add-on to the business portfolio – which was also what led to this agreement.

“The conversion will be rolled out in Sweden by Q3 of 2008. This is an exciting development for us but is merely a stepping stone to so much more. We envisage moving into other European countries after we fulfil this agreement and make it a success in Scandinavia first.”

Reitan Servicehandel is responsible for the Pressbyrån and 7-Eleven chains across Sweden, while also controlling Interpress – a press distributor within the country, supplying international magazines and newspapers to over 3400 other shops. Pressbyrån has a long history in Sweden that dates back to 1899 when it began distributing newspapers across the country. “To explain the nature of the stores today, they are similar to WH Smith, with a lot of newspapers and magazines, as well as confectionary, drinks, cigarettes and food,” comments Johannes.

He adds: “Our urban-based convenience stores, 7-Eleven, represent another of our major chains. With the first opening in 1994, we have grown to include 72 shops. Compared to Pressbyrån, 7-Eleven stores include more grocery products and fresh food, similar to Boots although we also have a cashier desk that is accompanied by a range of freshly baked goods, including hot dogs, pasta and pizza.

“We recently launched a new service where our customers are able to pay their road tax at any one of our stores, bringing more convenience to them. As of this year we also launched Western Union, a money transfer service and are currently looking to launch DHL service points too.” With an emphasis on healthy eating, Reitan Servicehandel continuously seeks ways to offer more fresh food. Johannes states: “We have a product line under our brand, ‘the Good Food’, which basically speaks for itself – healthier food along with fresh food and fruits. In October 2007, we also launched Innocent Drinks in every one of our shops in Sweden. The timing was perfect to launch the smoothies and it has been very successful indeed.

“Apart from health concerns, we also focus on social responsibility when it comes to our principles as well as the environment. For example, since January, we have only been selling Rainforest Alliance coffee in all our stores and havenow also changed our sandwich packaging into more environmentally friendly versions.”

Summarising on the current condition of the market, Johannes comments: “There are always opportunities for us to grow but we are focusing our efforts on comparable growth. I have been in this position for just over three years, and during this time I have witnessed some significant developments within the company. When I started, our comparable growth was close to zero, but within a year it was the best in our history, six per cent and last year we achieved a fantastic 10.2 per cent. In the last three years, we have enjoyed and achieved a whopping 25 per cent comparable growth in Sweden and we are extremely proud of that.

“With rising concerns over the environment and long-term bull market in oil, I believe that the convenience market will continue to expand as people want stores around the corner rather than having to get into their cars to drive a short distance to pick up some groceries.”