Business models

Together, Kesko and K-retailers form K Group, whose retail sales totalled approximately €15 billion in 2021. K Group is the biggest trading sector operator in Finland and one of the biggest Northern Europe. Our chain operations comprise some 1,800 stores in Finland, Sweden, Norway, Estonia, Latvia, Lithuania and Poland.

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 48% of Kesko’s net sales come from sales to retailers.

Kesko’s own retailing and B2B trade account for some 52% of net sales. In Finland, our own retailing and B2B trade comprise e.g. the car trade, Kespro, Onninen, non-food sales at K-Citymarket hypermarkets and Budgetsport. B2B trade in particular is a 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 €2.0 billion, or 18%, of our net sales in 2021. Kesko operates in seven countries: Finland, Sweden, Norway, Estonia, Latvia, Lithuania and Poland. In addition, K Group operates in Belarus via a joint venture.

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.

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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. In Norway, there are 14 Byggmakker retailers operating under the local retailer business model.

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. We employ a multi-store model, in which one retailer can have multiple stores. This creates synergies in e.g. management, personnel resourcing, and product selections.

The K-Retailers’ Association and individual K-retailers are significant shareholders in Kesko.

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Read more in 2021 Annual Report

Kesko's value creation chart illustrates how Kesko’s operations create value for its stakeholders and society.

 

Further information

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