Grocery trade

K-food stores offer their customers both low-priced and high-quality food. The aim is to have the highest-quality food stores in Finland where customers are served by about 900 K-food retailers running their locally tailored stores. Kesko’s grocery trade and K-food stores cooperate under an efficient chain business model.

Every day, around 900,000 customers visit K-food stores with high expectations of comprehensive, high-quality selections, ease of shopping, favourable prices and responsibility. Customers and quality are the centre points of all operations of K-food stores and the aim is to have the highest- quality food stores in Finland.

Cooperation between Kesko's grocery trade and K-food retailers is based on chain operations, which ensure customer orientation, business efficiency and the achievement of competitive advantages. Kesko's main functions include centralised sourcing, selection management, logistics, and the development of chain concepts and the store site network. Kesko also agrees on long-term cooperation models with various partner companies. Centralised operations ensure effective competitiveness.

Local K-food retailers tailor their stores to meet the needs of local customers as well as possible. K-retailers are responsible for the product selections, customer service, competence of staff, product quality and profitability of business in their own stores. Listening to the wishes of local customers and making use of customer data, the K-retailers build a selection of products and services that meet customers' needs. K-food retailers complement the chain's common product selection with local food from local producers.

Digital retail services developed together by Kesko and K-food retailers offer customers ideas and inspiration for cooking and easier ways to shop for their groceries. The K-food mobile application, for instance, provides personal benefits and store-specific offers as well as an intelligent shopping list that recommends products that the customer frequently buys, along with nearly 6,000 recipes with instructions. The network of K-food stores' online stores and click and collect services is growing. Customers have the large selections and low prices of their familiar stores also available online.

Kesko sold its grocery trade in Russia to Lenta in November 2016.

 

Kesko acquired Suomen Lähikauppa – Siwa and Valintatalo stores to be converted into K-Markets

Kesko published a stock exchange release on 12 April 2016 announcing that it has acquired the whole share capital of Suomen Lähikauppa Oy from the private equity investment firm Triton. With the acquisition of Suomen Lähikauppa, Kesko will grow in the neighbourhood market in line with its strategy and the neighbourhood retail services valued by Finnish consumers will improve significantly.

Suomen Lähikauppa's Siwa and Valintatalo stores will be converted into K-Market stores. At the same time, the renewal of the entire K-Market chain will begin. In the next few years, hundreds of new retailers will be recruited to run the new K-food stores.

The debt-free price of the acquisition, structured as a share purchase, is approximately €60 million. In 2015, Suomen Lähikauppa's net sales were €935.7 million, it has around 600 Siwa and Valintatalo stores and around 3,800 employees.

"As the acquisition is completed, Suomen Lähikauppa will have a committed, responsible and solid Finnish owner. In line with our strategy, we seek growth in the grocery trade by renewing and increasing our neighbourhood market network. Suomen Lähikauppa has excellent business locations and the acquisition will enable us to implement our strategy faster than planned and with significantly less capital expenditure," says Kesko's President and CEO Mikko Helander.

"The acquisition also enables significant synergies. We will now begin to write a new chapter in the Finnish neighbourhood retailing with the objective of doubling the footfall in our neighbourhood stores. The acquisition also supports the development of other K-Group grocery stores."

 

Competitive advantages in the grocery trade

  • Store-specific business idea - tailoring K-food stores according to local customer demand
  • The best fresh food departments and widest selections
  • K-retailer entrepreneurship guarantees customer-driven operations
  • Low-priced and high-quality Pirkka and K-Menu products
  • Domestic origins and responsibility – about 80% of the products are Finnish
  • A wide choice of digital services that make customers’ everyday lives easier and a comprehensive network of online food stores
  • Efficient customer dialogue – a million customer feedback responses per year

 

Grocery trade chains

K-citymarket

K-citymarkets are modern Finnish hypermarkets, which offer their customers varied and extensive selections of food and home and speciality goods. K-citymarkets are known for their best offers, local selections and food competence.

www.k-citymarket.fi

K-supermarket

K-supermarkets are better than average food stores, which provide both high-quality and low-priced products combined with easy shopping. Their strengths include superior fresh food departments, skilled staff, comprehensive service, the widest selections and Finnish products.

www.k-supermarket.fi

K-Market

K-Markets are reliable, service-oriented, local neighbourhood stores located near customers. K-Markets offer customers a versatile selection of everyday food and local services.

www.k-market.fi

K-ruoka, Russia

The competitive advantages of the K-ruoka food stores, which operate in Russia, include extensive, fresh and high-quality selections. There are nine K-ruoka stores in the St. Petersburg area.

www.k-ruoka.ru

Kespro

Kespro is the leading wholesaler in the Finnish hotel, restaurant and catering (HoReCa) business and acts as a partner for its customer companies and municipalities in Finland. Kespro provides its customers with diverse sourcing solutions as well as delivery and cash&carry services.

www.kespro.com

 

Own brands in 2015

Number of Pirkka products: 2,551
Number of Pirkka Organic products: 117
Number of new Pirkka products launched: 195
Number of K-Menu products: 291

www.k-ruoka.fi/pirkka-tuotteet

www.k-ruoka.fi/k-menu

 

Market in 2015

In 2015, the Finnish grocery trade market was worth about €16.6 billion (incl. VAT), representing a decrease of  0.7% (VAT 0%, Nielsen).

The Foodservice market (previously HoReCa) is estimated to have slightly decreased in 2015 from the previous year (Kesko's own estimate).

Market shares in 2015

Food trade

Market share in Finland: 32.7% (Nielsen)
Competitors: Prisma, S-market and Alepa/Sale (S Group), Valintatalo, Siwa (Suomen Lähikauppa Oy), Lidl, Stockmann and M chain stores

K-citymarket, home and speciality goods

Market share cannot be calculated reliably
Competitors: department stores, hypermarkets, speciality store chains and online stores
Foodservice

Kespro, Finland

The market share is estimated to have increased to about 22% (Kesko's own estimate)
Competitors: Meira Nova, Metro-tukku, Heinon Tukku and Suomen Palvelutukkurit

Net sales in 2015

Operating profit excluding non-recurring items in 2015 

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