Grocery trade strategy
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
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STRATEGIC OBJECTIVE |
WHAT WE ARE DOING |
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The most customer-oriented and inspiring food stores with store-specific business ideas |
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Profitable development and redesign of the store network |
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A seamless omni-channel customer experience |
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Good price competitiveness |
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Developing retailer entrepreneurship as a competitive advantage |
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Significant growth in the foodservice business |
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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 |
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| 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. |
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| 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 | ||
