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.

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

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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
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