Distribution Networks in Norway
Types of Outlet
Typical supermarkets. In cities in central locations. 99% of food in Norway is sold in the supermarkets.
Coop, Kiwi, ICA Ahold, Spar
- Shopping Centers
Traditional shopping centers with several shops. In largest cities.
Olav Thon Gruppen, Steen et Strom, Amfi Eiendom
- Specialized stores
Stores and chains of shops that specialize to one type of products: clothing, electronics, books, building supplies, etc.
Dressmann, Elkjop, Ark, Biltema
The sector is highly consolidated and the three largest chains control most of the market.
Alliance Boots, Apokjeden, Norsk Medisinaldepot
Evolution of the Retail Sector
- Growth and Regulation
Norway's retail and wholesale trade sector produces about 15 % of GDP and employs over 300 000 people. Total retail trade in 2003 was valued at 17,7 billion Euros, which is an increase of 3,3 % over 2002. There were approximately 10700 retail outlets in Norway in 2003. Mass market sales accounted for 84% of total turnover, the service sector represented 13%, and the grocery trade represented 3% of total turnover.
Norwegian retail trade is focused around main commercial centers, such as Oslo, Bergen, Trondheim, and Stavanger. Mergers or close collaborations between two or more companies have driven the structural change over the past few years, mostly in the grocery sector. Retailers aim to enlarge their operations in order to gain more negotiation power at the expense of producers and wholesalers. Because of the small domestic market, the Norwegian retailers are small compared even with other Scandinavian countries, and are not very active internationally.
Price levels in Norway are infamously high: groceries cost 50 % more than what is the EU average. Prices of alcohol and tobacco are even higher.
- Market Shares
The Norwegian distribution system is quite organized and consolidated. It is characterized by a fewer number of intermediaries, sensible margins, a diversity of trends, and dynamic professional syndicates. Distribution chains dominate the market, and some chains have strengthened their position by taking on the role of wholesaler as well, such as NorgesGruppen. The German discount chain Lidl decided to pull back from Norway and sell all its shops to Rema 1000 chain after poor results.
The principal Norwegian stores are:
- NorgesGruppen with 2,760 retail outlets and a 32% market-share with a turnover of 4,43 billion euros in 2004. It is Norway's largest trading enterprise and the leader in the distribution market.
- Coop with 910 retail outlets, a 19,9% market share, and turnover of 3,3 billion euros.
- ICA is a Swedish company with 1032 retail outlets, 19,5% market-share, and turnover of 2,85 billion euros.
Shopping centers have also known great success, reaching a total turnover of 1,5 billion euros in 2004 in 4 principal zones: Oslo, Akershus, Osdtfold and Vestfold; thus registering a growth of 6,3% as compared to 2003.
- Organizations in the Retail Sector
The federation of Norwegian commercial and service enterprises
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