“Only once things calm down somewhat can we see what the new normal for Finland will look like”

K Group has a unique perspective into how Finns eat, build and drive. During the coronavirus crisis, this has meant strong surges in demand in some areas, steep declines in consumption in others. Finland is still in the midst of a crisis, and no one knows how long the situation will last. It is therefore too early to say what everyday life will be like post-crisis.

Kesko published its Q1 results this week. The figures were good, but the impact of the coronavirus crisis was still limited in January-March.

“Going forward, the success of Kesko and other Finnish companies will largely depend on how Finland is able to ease restrictive measures and how the Finnish economy can begin to recover,” says Mikko Helander, Kesko’s President and CEO.

Helander finds predicting future market movements very difficult at the moment.

“Instead of our growth strategy, we are now focusing on crisis management and securing our operations. We must adjust our operations due to a decrease in sales and workloads, ensure our staff stays safe and healthy, and secure the availability of food and construction supplies in Finland. For now, everything else is secondary,” says Helander.

The epidemic has caused sales to both increase and decrease

Retail sales of food have grown during the epidemic in both physical stores and online. Finns are visiting grocery stores less frequently, buying more in one go. More and more people are ordering food online, and many stores have begun to sell restaurant food.

“The weekly growth rate in online grocery sales has peaked at 800%, and online sales now account for some 5% of our total food sales.  The epidemic has raised the level of online grocery shopping to new heights in Finland, and its popularity is expected to continue,” says Helander.

The epidemic and changes in consumer behaviour have meant busy times for many K-retailers and their staff. Store shelves need constant restocking, while some 20 new stores a week launch new online sales services. K-retailers have established sales channels for local restaurants in theirs stores, thus helping out both restaurants struggling with restrictions as well as people eating most of their meals at home.

Meanwhile, with restaurants, schools and workplaces closed, K Group’s foodservice wholesale company Kespro has seen its sales halved. The situation has also affected car sales, with a major decline in orders for new passenger cars. The demand for servicing has remained good, as people now have time to look after their cars.

“Finns have eagerly renovated their homes and summer houses. We have also not seen a drop in professional construction so far. However, things have been very quiet for leisure trade stores, and some of them have had to close down. The uncertainty regarding the future is emphasised in the building and technical trade division,” says Helander.

The epidemic has also affected work

In addition to those working on the front lines – store and logistics staff – K Group employs a wide variety of specialists, who have now been working remotely. According to a recent survey, these employees feel that working remotely has been very successful, with many stating that their productivity has actually increased as they do not need to move from one place to another during the workday.

However, K Group has had to put many development projects on hold to deal with the crisis. Workloads have also shrunk in many cases due to a steep decline in customer demand. Consequently, K Group has had to temporarily lay off employees.

“We have also moved people between units and functions internally to respond to the new situation. This has not always been easy, as each task is usually handled by someone with relevant expertise. Nonetheless, it has been great to witness how employees who usually sell food to restaurants have stepped up to help the elderly with online grocery shopping, or how people from other departments have been able to contribute to the development of our online stores,” says Helander.

K Group’s success goes hand in hand with Finland’s success

Helander is also Chairman for the so-called Exit Group of the Confederation of Finnish Industries, which aims to establish a road map for Finland to pull away from the extraordinary circumstances caused by the coronavirus crisis and begin reconstruction. This work also entails crisis management.

“The best case scenario would see the Finnish economy turn to a growth track before the end of the year. The main thing is to quickly get the epidemic under control and open up our economy. By safely and responsibly restarting the economy we would offer the best possible support to companies big and small,” says Helander.

“In the end, K Group’s success is tied to Finland’s success. We have been a bedrock for Finns during these exceptional times. We do not yet know how the crisis will affect the global and Finnish economy. We will learn more in upcoming weeks and months – only once things calm down somewhat can we see what the new normal for Finland will look like. Although we have temporarily put our growth strategy on the back burner, we will definitely return to it,” says Helander.

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