History

1940

Establishment of Kesko

Kesko was established in October 1940 when four Finnish regional wholesaling companies founded by retailers - Savo-Karjalan Tukkuliike, Keski-Suomen Tukkukauppa Oy, Kauppiaitten Oy and Maakauppiaitten Oy - merged their operations. The new company began operations at the beginning of 1941.

The K-retailer group was formed to support the retailers who held shares in Kesko in their business operations and in purchasing goods and as a platform for collaboration between the retailers. Soon began the active building of the K-store network, with joint advertising efforts. The 'K' emblem was introduced as the new group's symbol.

The name 'Kesko' was invented by Managing Director E.J. Railo. The word in itself does not mean anything in Finnish, but phonetically it resembles the Finnish verb for concentration (keskittyminen), which in this case referred to the concentration of four regional wholesalers into one nationwide Kesko.

The number of Kesko's personnel was about 2,000.

1950

Period of growth

The post-war rationing of goods and regulation of imports held back growth in the first years of the 1950s. Towards the end of the decade, when restrictions were removed, Kesko began building networks for speciality stores to complement its general stores. Kesko played a significant role in developing store formats in Finland. Initially the main emphasis was on establishing a hardware store network and a warehousing system for the hardware products offered by Kesko. In addition, big efforts were made to develop the trade of agricultural supplies and machinery.

During the 1950s Kesko also developed its own, strong industrial operations. They included the milling, bread, meat, margarine and clothing industries, and a coffee roastery. Furthermore, the network of branch offices expanded. By the turn of the decade, Kesko had established 40 service outlets - the maximum number in its history - of which 23 were actual offices.

The number of personnel had increased to about 5,000.

1960

A new course

In the 1960s, food retailing in Finland saw major changes. As people became less self-reliant in their daily grocery needs, fresh foods were added to store selections, and general stores began to evolve more into grocery stores.

In the middle of the decade, the self-service concept revolutionised this field. The number of stores in the countryside decreased. Kesko set up its central warehouse at Hakkila, in Vantaa. The introduction of automatic data processing and interchange allowed the development of centralised distribution operations. Kesko began to divest its industrial operations.

Kesko's ownership base was broadened, and the company was listed on the Helsinki Stock Exchange in 1960. The personnel numbered about 5,700.

1970

Information technology spurs growth

In the 1970s Kesko continued to grow steadily, in the foodstuffs trade in particular. A new store format - the supermarket - was successfully launched. Further steps were taken to strengthen the speciality store network. The responsibility for developing store formats was transferred to the commercial divisions. Kesko and the K-retailers entered the retail trade in the fields of home and speciality goods and hardware products. The Kesport chain was established. The first Citymarket hypermarket was opened in Lahti in 1971.

Significant advances were made in logistical operations, thanks to the introduction of automatic data processing. Kesko became one of the Finnish pioneers in data processing and interchange. Due to improvements in information technology, telephone connections and the transport fleet, the number of Kesko's branch offices started to decrease. Training became increasingly important for both Kesko and the K-stores, and Kesko purchased a training centre, naming it the K-institute.

At the end of the decade, the number of personnel was about 6,000.

1980

New investments and new owners

The 1980s represented a period of heavy investment for Kesko. Building projects included new business premises for the branch offices in Turku and Oulu, a new central warehouse and several large retail stores. The share capital was increased to finance these investments. The number of shareholders grew by 20,000.

The divestment of Kesko's industrial operations was continued by selling the clothing factory and the bicycle factory. The number of branch offices dropped from 16 to 9. Pirkka label products (Kesko's own label) were introduced to the market.

At the end of the decade, the number of personnel was about 7,700.

1990

Chain operations start

Kesko was changed significantly by the establishment of new grocery store formats and the transfer to chain operations. Centralisation continued. The number of district units dropped to five, and they mainly engaged in the grocery trade. The forming of chain units and profit groups, and the incorporation of operations, created a more customer-oriented, profit-targeted operating model.

Other key elements of the model were the integrated EDI system of the retail stores, and chain marketing focused on customer loyalty schemes. During the 1990s, Kesko acquired Rautia chain and Anttila Oy, and divested Keskometalli Oy. New growth was sought from markets in neighbouring countries, as well. The Plussa customer loyalty marketing system reached the limit of 2.5 million customers in a short time.

At the end of the decade, the average number of personnel was 11,000.

2000

A time for internationalisation

Entry into the Swedish and Baltic markets that had started in the mid-1990s gained momentum at the turn of the millennium. Major spearheads in the internationalisation process were the retailing of hardware and builders' supplies and the K-rauta format. Kesko also expanded its agricultural business to all Baltic countries, becoming a market leader in the area in a very short time.

Progress in food retailing was mainly made through two store types: hypermarkets and hard discounters. Kesko Food and the Swedish ICA combined their food trade operations in the Baltic countries. In 2006, Kesko Food sold its 50% shareholding in Rimi Baltic AB to ICA Baltic.

A network of hardware and builders' supplies stores was created in Sweden by building K-rauta outlets one by one, as K-rauta turned out to be "a successful export product", which was something new to the Swedish market. In the Baltic countries progress was made in the hardware and builders' supplies sector, both through business acquisitions and by establishing new outlets. An important acquisition in Lithuania (Senukai) made Rautakesko the market leader in the Baltic countries in 2004.

In 2005, Rautakesko expanded into Norway and Russia by acquiring Byggmakker, the best-known hardware and building materials chain in Norway, and Stroymaster, a St Petersburg DIY store chain. In July 2007, Senukai acquired the majority of voting rights in the Lithuanian UAB Romos Holdingas, which owns OMA, a Belarussian DIY operator.

Byggmakker, acquired by Kesko in 2005, is the best known building and home improvement store chain in Norway.

Russia’s first K-rauta concept store was opened in St. Petersburg in September 2006. The Stroymaster chain stores have operated under the K-rauta name since 2006.

Rautakesko is one of the fifth largest companies in the European building and home improvement market in terms of its chains’ retail sales.

The average number of personnel was 19,000 at the end of the decade.

2010

Online trade grows

For shopping customers, the internationalisation of retailing has meant a wider choice and ease of purchasing. In the 2000s, the increased use of the Internet and the online retail revolution have made shopping easier and led the trading sector to a new turning point.

Over the course of its history, Kesko has responded to the changes in customer behaviour and society by setting up new kinds of store types, improving logistical efficiency, producing brands of its own and forming store chains.

Now both traditional and online stores are seeking new business forms, and Kesko and K-stores will continue to change with this development.

Kesko Food opened the first grocery store of the K-ruoka chain in St. Petersburg in 2012. The chain expanded rapdidly. Kesko sold its grocery trade in Russia in November 2016.

Kesko divested the department store chain Anttila Oy in March 2015.

In terms of Kesko's growth strategy, it was essential to acquire Suomen Lähikauppa in April 2016 and the acquisition of Onninen completed in June 2016. With the acquisition of Suomen Lähikauppa, Kesko's neighbourhood retail services will improve significantly. The acquisition of Onninen, for its part, will materially strengthen Kesko's position in the building and technical trade. Both of the acquisitions will enable strong growth and more customer oriented services as well as significant synergies.

Kesko discontinued its building and home improvement trade operations in Russia in February 2018. In May 2019, Kesko acquired Fresks Group which is a significant operator in the Swedish builders' merchant business.