Grocery trade strategy

The strategy for the grocery trade division is to increase sales and profitability with a customer-oriented approach in a changing market. Although the coronavirus epidemic has affected our operations significantly from mid-March 2020 onwards, the foundation for our strategy remains solid also under these exceptional circumstances. Growth in food sales has been strong in K-food stores and online, and our customer satisfaction is very good. Kespro’s sales declined heavily in the spring due to restrictions imposed on restaurants and cafeterias. A distinct turnaround for the better was seen in the foodservice business in June.

We continue the determined execution of our growth strategy, but for now our focus is on managing the situation brought on by the coronavirus epidemic. Information on the impacts of the epidemic on Kesko’s businesses can be found under the Operating environment section.

 

Our strategic objectives: 

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
  • Improved food solutions
  • Developing digital solutions and services

Profitable development and redesign of the store network

  • Brand and concept redesigns

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 

  • Strengthening 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

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 consciousness
  • Operations and concepts must be responsible and sustainable 

Comparable figures

 

The grocery trade strategy review can be read in Kesko's 2019 Annual Report.

In 2019, the Finnish grocery trade market was worth approximately €18.6 billion (incl. VAT), representing a growth of some 2% (Kesko's own estimate). The overall market growth was impacted by e.g. continued good consumer purchasing power and a rise in prices, over onethird of which was attributable to increases in alcohol and tobacco taxes. Price competition in the Finnish grocery trade market has continued to be intense. However, consumers also increasingly value local food, sustainability, healthiness and quality..

MARKET SHARES

Grocery trade

The market share in Finland is 36.7% (Kesko’s own estimate based on Nielsen’s new 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), Lidl, Tokmanni, Minimani, Halpa-Halli 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, Finland

The market share is estimated to have strengthened to approximately 42.2% (Kesko's own estimate, based on the Finnish Grocery Trade Association’s Foodservice wholesale market peer group).

Competitors: Meira Nova, Metro-tukku, Heinon Tukku, Suomen Palvelutukkurit.

  Number Sales (pro forma) (VAT 0%),
€ million
Retail sales and number of stores 2019   2019 Change, %
K-Citymarket, food 81   1,711.3 5.4
K-Citymarket, non-food 81   586.5 0.5
K-Supermarket 243   2,051.3 4.1
K-Market 777   1,863.7 2.1
Neste K 73   130.9 -1.2
Others 78   43.6 5.9
Total 1,252   6,387.3 3.4
Kespro  -    944.3 7.6
Grocery trade, total 1,252   7,331.5 3.9
In addition, several K-food stores offer e-commerce services to their customers.
 
Key figures Rolling
12 mts
6/2020
2019 2018
Net sales, € million 5,611.3 5,531.2 5,385.7
Operating profit, comparable, € million  335.4 327.9 294.5
Operating margin, comparable 6.0 5.9 5.5
Return on capital employed, comparable, %, rolling 12 months 14.8 14.5 13.1
Capital expenditure, € million 154.7 180.8 124.1
Personnel, average - 6,063 6,094
         
Properties   2019 2018
Owned properties, capital, € million   763 658
Owned properties, area, 1,000 m²   516 433
Leased properties, lease liabilities, € million   1,495 1,512
Leased properties, area, 1,000 m²   1,520 1,581
To top