Business models

Kesko's business model 

Kesko’s business model comprises Kesko’s own retailing and B2B trade, and the chain business model.

In Finland, the biggest business model in terms of percentage is the chain business model, in which independent K-retailers run retail stores in Kesko’s chains, namely the grocery store chains, and the K-Rauta and Intersport chains. Some 46% of Kesko’s net sales come from sales to retailers.

Kesko’s own retailing and B2B trade account for some 54% of net sales. In Finland, Kesko’s own retailing and B2B trade comprise e.g. car trade, Kespro, Onninen, non-food sales at K-Citymarket hypermarkets, and part of the Intersport sales and Budget Sport. B2B trade in particular is a strongly growing part of Kesko’s business operations. Outside Finland, Kesko mainly engages in own retailing and B2B trade.

Net sales from international operations totalled some €2.2 billion, or 19%, of Kesko’s net sales in 2022. Kesko operates in seven countries: Finland, Sweden, Norway, Estonia, Latvia, Lithuania and Poland. In addition, K Group operates in Belarus via a joint venture.

Strong market position

Kesko is one of the leading trading sector operators in Northern Europe. Finland accounts for some 80% of net sales, and overall Kesko is the biggest trading sector operator in the country, and number one in building and technical trade and car trade. We are also among the biggest operators in the Nordic and Baltic countries in various customer segments. Our objective is to grow our market shares in various operations, and to be among the top two operators in all our businesses to ensure economies of scale.

The constant improvement of customer experiences and further development of digital services are at the heart of our growth strategy. We use quality and customer experience to differentiate ourselves from the competition in both our stores and digital services.

K-retailer operations in Finland

In Finland, Kesko’s principal business model is the chain business model, in which some 1,100 independent entrepreneurs – referred to as K-retailers – operate retail stores in Kesko’s chains, which include the grocery store chains, the K-Rauta chain, and the Intersport chain. Outside Finland, Kesko mainly engages in own retailing and B2B trade.

Kesko is responsible for the continuous development of the operating model and store concepts, for steering chain operations, for purchasing products included in chain selections, and for the store site network.

K-retailers are responsible for their store-specific business ideas, customer satisfaction, store personnel and business performance. The multi-store model, in which one retailer can have multiple stores, creates synergies in e.g. management, personnel resourcing, and product selections.

K-Retailers’ Association is a co-operative organisation for K-retailers that oversees their interests. It holds 5.13% of the shares or a 13.31% share by votes of Kesko’s shares (31 Dec. 2022). K-retailers are significant Kesko shareholders.

Read in the 2022 Annual Report