Every day, approximately 1.2 million customers visit K Group's food stores. K-food retailers are responsible for customer satisfaction at K-food stores, and Kesko's grocery trade works with these retailers under the chain business model. The K-food store chains are KCitymarket, K-Supermarket, K-Market and Neste K. K-food stores are the world's most sustainable companies in their sector. Further strengths include superior fresh food departments, professional service, diverse and high-quality selections, Finnish products and the own brand Pirkka.
The acquisition of Suomen Lähikauppa, completed in April 2016, enables K Group to offer Finland's most comprehensive network of the most service-oriented neighbourhood stores. All Siwas and Valintatalos will become K-Markets by spring 2017, and will gradually be transferred to K-retailers by the end of 2018.
The K-Supermarket chain will also expand. In 2016 and 2017, we will establish almost 30 entirely new stores, and more than 20 stores will be completely renewed. We are updating our entire hypermarket concept and we will revamp all K-Citymarkets by the end of 2018. The aim is to create 81 different K-Citymarkets with product selections and services that reflect their customer bases. By the end of 2016, 23 stores had been updated.
In accordance with its strategy, Kesko is focusing on the Finnish grocery trade. The company sold its grocery trade businesses in Russia to Lenta, a Russian grocery trade operator, in November 2016.
Kesko had 10,338 personnel working in the grocery trade at the end of 2016. K Group (Kesko and the K-retailers) is the second largest operator in Finland's grocery trade with a market share of approximately 37-38% (Kesko's own estimate after the acquisition of Suomen Lähikauppa).
Collaboration between Kesko's grocery trade and K-food retailers is based on chain operations, which ensures customer orientation, business efficiency and the achievement of competitive advantages. Kesko's key operations are centralised purchasing, selection management, logistics, and developing chain concepts and the store site network. Kesko also agrees upon long-term collaboration models with different partner companies. Centralised operations guarantee efficient competitiveness.
K-food retailers are tasked with tailoring their stores to take local customer needs into consideration to the maximum possible extent. K-retailers look after the selections, customer service, personnel competence, product quality and business profitability of their stores. K-retailers tailor their product selections and services according to the needs of local customers by listening to their wishes and making use of customer data obtained from the Plussa customer loyalty programme. K-food retailers complement the common product selection in their chains by adding products such as those available from local producers.
Digital services developed jointly by Kesko and K-food retailers offer customers ideas and inspiration for cooking, as well as easier ways to shop for food. Digital services provide customers with more personalized benefits from K-food stores and local store-specific offers. The K-food mobile app offers a smart shopping list that recommends products that the customer frequently buys. It also includes thousands of recipes.
Almost 100 K-food stores around Finland are offering online food stores that operate locally, as well as click and collect services. Customers have access to the extensive selection of products and inexpensive prices of the familiar store also online. Self-service checkouts have already been installed in dozens of K-food stores around Finland to make the daily lives of time-pressed customers easier.
K-Citymarket is a modern hypermarket that offers its customers diverse, extensive selections of food, as well as home and speciality goods. K-Citymarket is well known for its best offers, wide selections and food expertise.
The mission of K-Supermarket undergoing modernisation is to inspire Finnish people to eat better – K-Supermarket is the number one choice for customers who are passionate about food. The strengths of K-Supermarket lie in quality, providing new food ideas, an extensive and up-to-date selection, local products, and superior customer service.
K-Market is a personal, service-oriented, genuinely local neighbourhood store near its customers – a village store for the modern age. K-Market offers customers diverse selections of food and local services to conveniently suit their everyday lives.
The Neste K stations will be revamped to become food oriented and welcoming service stations. Customers will be offered high-quality, personalised service station services quickly and conveniently. The aim is to build a network of 100 revamped Neste K stations.
Kespro is Finland's leading provider of Foodservice services (formerly known as HoReCa) and a wholesaler. Kespro acts as a partner for its customer companies and municipalities in Finland and offers its customers a diverse range of procurement solutions, as well as delivery and collection services.
Number of Pirkka products: 2,593
Number of Pirkka Organic products: 118
Number of new Pirkka products launched: 66
Number of K-Menu products: 313
In 2016, the Finnish grocery trade market was worth approximately €16.8 billion (incl. VAT), representing an estimated rise of approximately 1% (Kesko's own estimate). The market as a whole has experienced a cautious growth, influenced by factors such as the liberalisation of opening hours for food stores. In recent years, the Finnish grocery market has been characterised by fierce price competition.
* Includes the 1.5% market share of Suomen Lähikauppa from before the acquisition.
The market share in Finland is approximately 37-38% (Kesko's own estimate). Competitors: Prisma, S-market and Alepa/Sale (S Group), Lidl, Stockmann, Tokmanni and M-chain shops.
K-Citymarket's home and speciality goods
Market share cannot be reliably calculated. Competitors: department stores, hypermarkets, discounters, specialist chains and online stores.
The market share is estimated to have strengthened to approximately 43% (Kesko's own estimate). Competitors: Meira Nova, Metro-tukku, Heinon Tukku, Suomen Palvelutukkurit.