Investor blogs and podcasts
In Kesko’s investor blogs and podcasts, Kesko’s management discusses topical issues relevant to investors and shareholders.
IR Blog: Strategy execution continues - price investments in grocery trade
One of the objectives for Kesko's strategy – which was updated last summer – is to profitably gain market share in grocery trade. Key measures taken to achieve this are:
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Strengthening store-specific business ideas: focusing on strengthening our chosen competitive advantages and further improving the quality of K Group grocery stores
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Developing our store network: making targeted investments in the store network, with an emphasis on growth centres; and
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Improving our price competitiveness: strengthening the price competitiveness of our grocery stores and improving their price image.
Kesko is the quality leader in Finnish grocery, and we will not be compromising on quality at any point. At the start of January, we announced a new price programme that will cut prices on over 1,200 products in K Group grocery stores. K Group cuts the prices of some 1,000 everyday brand staples and some 200 popular Pirkka K Group private label products, in other words everyday staples that consumers buy often and that account for a significant portion of sales. Price reductions of branded products are on average 4–6 percent, but at best, the price cuts can be as much as 15–20 percent. For Pirkka private label products, the price reductions are on average 9-12 percent. Campaigns and offers are in our DNA, and we will continue them also in 2025, but the price programme is a more long-term effort, with significant investments in the basic price levels of our stores.
The price reductions have been made in close cooperation between Kesko, the K-retailers, and product suppliers. Kesko and K-retailers together will invest some €50 million in the programme during 2025. Reducing the price of popular branded products fits Kesko’s strategy better than, for example, adding cheap foreign products to our selections.
In addition to the investments made in basic price levels, K Group's grocery stores will continue to offer their popular OmaPlussa mobile benefits, the reasonably priced Pirkka private label range with over 2,600 products, and various other offers and campaigns.
As stated when we launched the updated strategy, investments in price and the store network will have a slight impact on the profitability of the grocery trade division in the coming years. However, despite the investments, the grocery trade division’s operating profit development will continue to be stable, and our aim is to keep the division’s profitability clearly above 6% during the 2024-2026 strategy period.
