Grocery trade strategy

In the grocery trade division, Kesko will strive to maintain its position as the most customer-oriented and profitable grocery retailer in Finland and the market leader in online grocery trade. The growth strategy is based on store-specific business ideas, extensive utilisation of data and strong digital capabilities, combined with efficient processes. The division aims to further strengthen its market-leading position in Finnish foodservice.

Strategic focus areas

Business environment 

  • Digital is a basic requirement 
  • Hybrid and polarised consumption set to grow stronger 
  • Significant demographic changes 
  • Emphasised importance of climate change and environmental awareness
  • Operations and concepts must be responsible and sustainable

 

STRATEGIC OBJECTIVE

WHAT WE ARE DOING

The most customer-oriented and inspiring food stores with store-specific business ideas

  • Further sharpening store-specific business ideas
  • Differentiation through selections and even better food solutions
  • Developing digital solutions and services

Profitable development and redesign of the store network

  • Remodelling the stores, new concepts

A seamless omni-channel customer experience 

  • Expanding the online sales network and increasing sales
  • Updating the K-Ruoka mobile application
  • Implementing personalised customer communications

Good price competitiveness

  • Developing selections
  • Utilising synergies
  • Own brands

Developing retailer entrepreneurship as a competitive advantage 

  • Enforcing the good reputation of K-retailership as a career
  • More extensive implementation of store-specific business ideas
  • Developing tools for management by information

Significant growth in the foodservice business 

  • Increasing sales and profitability
  • Developing services and concepts

Grocery trade net sales, operating profit and operating margin, rolling  

 

The grocery trade strategy review can be read in Kesko's 2020 Annual Report.

 

In 2020, the Finnish grocery retail market totalled some €20.2 billion (incl. VAT),
representing an increase of some 8.6% (Kesko’s own estimate). People working from home and restrictions imposed on restaurants, events and travel due to the Covid-19 pandemic impacted total market growth from mid-March onwards. Retail market growth was also affected by continued good consumer purchasing power and a rise in prices, nearly onethird of which was attributable to alcohol and tobacco tax increases. Price competition in the Finnish grocery market continued to be tight, but consumers also increasingly value local food, sustainability, healthiness and quality. The Covid-19 pandemic significantly accelerated online sales growth.

MARKET SHARES

Food trade
The market share in Finland was 36.8% ((Kesko’s estimate based on Nielsen’s comparison
group, which includes discount stores and service stations as well as grocery stores).

 

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
Working from home and pandemic-related restrictions on restaurants and events negatively impacted the foodservice business. Kespro’s market share is estimated to have grown to 42.5% (in the Finnish Grocery Trade Association’s foodservice wholesale peer 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
  2020   2020 Change, %
K-Citymarket, food 81   1,934.5 13.0
K-Citymarket, non-food 81   587.7 0.2
K-Supermarket 241   2,235.2 9.0
K-Market 769   2,001.0 7.4
Neste K 72   114.6 -12.4
Others 78   46.3 6.2
Total 1,236   6,919.2 8.3
Kespro  -    783.9 -17.0
Grocery trade, total 1,236   7,703.1 5.1
In addition, some 470 K-food stores offer e-commerce services to their customers (31.12.2020). 
Kespro has 14 cash & carry outlets and an online outlet.
 
Key figures   2020 2019
Net sales, € million   5,732.0 5,531.2
Operating profit, comparable, € million    375.2 327.9
Operating margin, comparable   6.5 5.9
Return on capital employed, comparable, %, rolling 12 months   16.9 14.5
Capital expenditure, € million   125.4 180.8
Personnel, average   6,197 6,063
         
Properties   2020 2019
Owned properties, capital, € million   792 763
Owned properties, area, 1,000 m²   527 516
Leased properties, area, 1,000 m²   1,478 1,520
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