Some 1.2 million customers visit K-food stores every day. Customer satisfaction is guaranteed by K-food retailers, and we operate with them under the chain business model. The K-food store chains are K-Citymarket, K-Supermarket, K-Market and Neste K service stations. On the Global 100 Most Sustainable Corporations in the World list, Kesko ranks 31st, being the most responsible trading sector company in the world. Our strengths include versatile high-quality selections, strong emphasis on Finnish products, skilfully constructed fresh food departments, and professional service.
Consumer habits in the grocery trade are changing. Purely price-conscious consumption has given way to hybrid consumption, i.e. consumers who accept only the alternative that is of the highest quality or the most ethical in certain product groups, yet are extremely price conscious about other products. Nearly half of all Finns can already be considered hybrid consumers. K-food stores are responding to the changes in consumer behaviour by offering quality products that have been produced responsibly, while ensuring their selection is also competitively priced.
K Group is the second biggest operator in the Finnish grocery trade with a market share of approximately 37.2% (Kesko's own estimate after the acquisition of Suomen Lähikauppa). At the end of 2017, around 6,700 people worked in Kesko's grocery trade.
Following the acquisition of Suomen Lähikauppa in 2016, we now offer the most extensive network of neighbourhood stores in Finland with over 800 K-Markets. The last remaining Siwa and Valintatalo stores were restyled into new K-Markets in the spring of 2017. All of the acquired stores will be run by K-retailer entrepreneurs by summer 2018.
We are redesigning our entire hypermarket concept and nearly all K-Citymarkets by the end of 2018. Our aim is to create individual K-Citymarkets whose product selections and services reflect their respective customer bases. The work began in 2015 and so far 35 K-Citymarkets have undergone a transformation. We have also made changes to our home and speciality goods selections, where the focus is now especially on cosmetics, home textiles, clothing and footwear.
In 2017, we also began the redesign of the K-Supermarket chain stores. Over the next few years, we will change the appearance and marketing of all K-Supermarkets to conform to the new concept. The redesign of Neste K service stations to fit their new concept will continue until the end of 2018.
Kespro is the leading wholesale company serving the Finnish hotel, restaurant and catering sector. Kespro is increasingly recognised as a restaurant trend expert that offers its customers tailored, versatile purchasing solutions. Kespro’s look was also updated in 2017, and the new look better supports Kespro’s leading position in Foodservice. Kespro’s strong development is underpinned by the robustly growing trend of eating out.
The selections and services of K-food stores are shaped by various factors such as the increased demand for vegetarian food, population ageing, the growing number of single-person households, urbanisation and multiculturalism.
K-food retailers independently look after the selections, customer service, staff competence, product quality, and business profitability of their stores. They tailor their product selections and services according to the needs of local customers by listening to customer wishes and making use of customer data obtained from the Plussa customer loyalty programme. They complement chain selections in their stores with, for example, food by local producers.
Consumers are increasingly doing their shopping online. We offer digital services that make life easier for our customers and also provide increasingly personalised benefits. Our customers receive local, store-specific offers via the K-ruoka mobile app, for example. We offer our customer an easy-to-use digital channel for feedback, Hymy. Some one million customer contacts happen through Hymy each year. In 2017, we launched the K-Plussa student benefit to make shopping more affordable for students.
In 2017, we began a collaboration in China with the global online store operator Alibaba to export Finnish food brands and our own Pirkka products to the growing Chinese market. The collaboration gives us an opportunity to learn from a global e-commerce pioneer and consequently develop our own online store. Our locally-operated online food stores and click & collect services mean customers can access our wide selections online across Finland. Self-service checkouts are available for customers in a hurry at hundreds of K-food stores.
K-Citymarket is a modern and affordable hypermarket that offers its customers diverse, extensive selections of food and home and speciality goods. Our service counters offer the best food expertise in Finland. The K-Citymarket chain comprises 81 stores.
K-Supermarket’s mission is to inspire Finns to eat better, and be the number one choice for customers who are passionate about food. K-Supermarket’s strengths lie in quality, providing new food ideas, an extensive and current selection, local products, and customer service. There are 235 K-Supermarkets.
K-Markets are personal, service-oriented, genuinely local neighbourhood stores – the village stores for the modern age. K-Markets offer their customers diverse selections of food and local services to conveniently suit their everyday lives. The K-Market chain has more than 800 stores and the most extensive network of neighbourhood stores in Finland.
The extensive network of Neste K service stations offers customers restaurant quality food and personalised high-quality services quickly and conveniently. The network currently comprises 71 service stations. Our goal is to establish a network of one-hundred new type of Neste K service stations by the end of 2020.
Kespro is the leading Foodservice (previously HoReCa) provider and wholesale company in Finland. Kespro acts as a partner to its customer companies and municipalities in Finland and offers its customers a diverse range of food procurement solutions, as well as delivery and collection services. The selection includes fresh foods, processed foods, specialty goods, wine and alcohol.
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.
The market share in Finland is approximately 37.2% (Kesko's own estimate). Competitors: Prisma, S-market and Alepa/Sale (S Group), Lidl, Stockmann, Tokmanni, Halpa-Halli 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 41% (Kesko's own estimate, based on new peer group and the Finnish Grocery Trade Association’s Foodservice wholesale market size as of the start of 2017). Competitors: Meira Nova, Metro-tukku, Heinon Tukku, Suomen Palvelutukkurit.