Grocery trade strategy
K Group is the second biggest grocery trade operator in Finland. Some 1,000 independent K-retailers ensure good customer experiences for the 1.2 million daily customers at K Group’s 1,200 grocery stores. Over 500 of the stores also offer online grocery sales. Our grocery store chains are K-Citymarket, K-Supermarket, K-Market and Neste K. We are the market leader in online grocery in Finland, and in 2021, online grocery sales via K-Ruoka grew by 14.2%. Kespro is the leading foodservice wholesale provider in Finland.
Strategic focus areas
Year 2021
Good progress continued in Kesko’s grocery trade division also in 2021, and food trade demand was strong throughout the year. In the
foodservice business, demand took an upturn, supported by market recovery as Covid-19 vaccination rates rose. Our strength in grocery trade lies in our extensive network of brick-andmortar stores combined with efficient online grocery sales and our effective retailer business model. Our strategic objective is to use store-specific business ideas to constantly improve customer experiences.
The grocery trade strategy review can be read in Kesko's 2021 Annual Report.
Grocery trade key figures
|
|
1-12/2021 |
1-12/2020 |
10-12/2021 |
10-12/2020 |
|
Net sales, € million |
5,909.0 |
5,732.0 |
1,556.9 |
1,517.2 |
|
Operating profit, comparable, € million |
442.9 |
375.2 |
131.0 |
123.2 |
|
Operating margin, comparable, % |
7.5 |
6.5 |
8.4 |
8.1 |
|
Return on capital employed, comparable, % |
20.6 |
16.9 |
20.6 |
16.9 |
|
Capital expenditure, € million |
122.8 |
125.4 |
46.1 |
15.6 |
|
Personnel, average |
6,126 |
6,197 |
6,098 |
6,346 |
Market
In 2021, the Finnish grocery retail market totalled some €21 billion (incl. VAT), representing
an increase of approximately 2.9% (Kesko’s own estimate). Total market growth has been
impacted by the pandemic, with more people working from home and restrictions imposed
on restaurants, events and travel. Retail market growth was also impacted by continued good
consumer purchasing power and a rise in prices, nearly one-third of which was due to rise in
alcohol and tobacco taxes. Price competition in the Finnish grocery trade market continued
to be tight. However, customers also increasingly appreciate local food, sustainability,
healthy options, and quality. Online grocery sales continued to grow.
Market shares
Grocery trade
Kesko’s market share in Finland is 36.7% (Kesko’s own estimate based on Nielsen’s
comparison group which includes discount stores and service stations as well as grocery
stores). Market share is estimated to have decreased slightly in 2021.
Competitors: Prisma, S-market, Alepa/Sale and Food Market Herkku (S Group), ABC, Lidl,
Tokmanni, Minimani, Halpa-Halli, R-kioski and M-chain stores.
K-Citymarket’s home and speciality goods
Market share cannot be reliably calculated.
Competitors: hypermarkets, department stores, discounters, specialist chains, and online
stores.
Foodservice Kespro
Restrictions imposed on restaurants, events and travel due to the pandemic and
recommendations to work from home impacted the foodservice business negatively. Kespro’s
market share is estimated to have grown and to stand at 44.0% (in the Finnish Grocery Trade
Association’s Foodservice wholesale comparison group).
Competitors: Meira Nova, Metro-tukku, Heinon Tukku, Suomen Palvelutukkurit.
| K Group's grocery trade | Number of stores | Retail and BtoB sales, VAT 0%, € million |
|
| 2021 | 2021 | Change, % | |
| K-Citymarket, food | 81 | 2,007.4 | 3.8 |
| K-Citymarket, non-food | 81 | 621.1 | 5.7 |
| K-Supermarket | 244 | 2,265.2 | 1.3 |
| K-Market | 768 | 2,033.8 | 1.6 |
| Neste K | 73 | 114.7 | 0.1 |
| Others | 71 | 45.9 | -0.8 |
| Total | 1,237 | 7,088.0 | 2.4 |
| Kespro | - | 866.7 | 9.9 |
| Grocery trade, total | 1,237 | 7,954.6 | 3.2 |
| In addition, over 500 K-food stores offer e-commerce services to their customers. Kespro has 14 cash & carry outlets and an online outlet. |
|||
| Key figures | 2021 | 2020 | |
| Net sales, € million | 5,909.0 | 5,732.0 | |
| Operating profit, comparable, € million | 442.9 | 375.2 | |
| Operating margin, comparable | 7.5 | 6.5 | |
| Return on capital employed, comparable, % | 20.6 | 16.9 | |
| Capital expenditure, € million | 122.8 | 125.4 | |
| Personnel, average | 6,126 | 6,197 | |
| Properties | 2021 | 2020 | |
| Owned properties, capital, € million | 817 | 792 | |
| Owned properties, area, 1,000 m² | 550 | 527 | |
| Leased properties, area, 1,000 m² | 1,480 | 1,478 | |
