Grocery trade strategy

K Group is the second biggest grocery trade operator in Finland. Some 900 independent K-retailers ensure good customer experiences for 1.2 million daily customers at K Group’s 1,200 grocery stores. Over 700 of the stores also offer online grocery services, also with fast deliveries in collaboration with Wolt. Our grocery store chains are K-Citymarket, K-Supermarket, K-Market and Neste K. Kespro is the leading foodservice wholesale provider in Finland.

Strategic focus areas:

• Maintaining profitability: The target is to maintain good profitability with an operating margin clearly above 6%
• Gaining market share
• Developing store site network: Expanding the store network in growth centres and updating a large number of stores.
• Improving price competitiveness: Improving price competitiveness with a systematic price program, financed by both Kesko and K-retailers.
• Raising the level of store-specific business ideas: Focusing on fixing the basics, actively monitoring store performance.
• Improving fresh departments: Restoring competitiveness in selected fresh departments.
• Investing in am omnichannel and personalised customer experience: Utilising advanced technology, e.g. AI, to further develop processes and improve efficiency.
• Inventing new business models for new sources of income: Investing in selected new businesses utilising K Group’s ecosystem, e.g. media and data business.
• Further strengthening Kespro’s market-leading position

Megatrends in operating environment

Purchasing power

• Consumer confidence and purchasing power still low
• Price still important, offers and campaigns drive customer flows
• Daily competition over customers continues

Demographic changes

• Population ageing, concentrated in growth centres
• Growing number of smaller households
• Growing importance of seniors and immigrants
• Store site network and selections must reflect the changes

Megatrends in consumption

• Growing importance of convenience and eating out
• Growing importance of personal wellbeing for certain consumers
• Addressing individual needs – better relevance through data

Importance of ai, data and  digitalisation

• Cost of tailoring and personalisation decreasing with AI
• Digital-assisted sales growing
• Also new business centred around data

Competition

• Continued high level of investments from all operators
• Competing with selections and prices in physical stores and online
• Tightening competition in non-food online sales

Kesko organised an investor event on Tuesday, 4 June 2024. At the event, President and CEO Jorma Rauhala and other members of Kesko’s top management presented the company’s updated strategy and focus areas for the three business divisions. The event was held in English. Watch the recording and related materials here.

Read more about the events in year 2023 in Kesko's Annual Report.