What do supermarkets, builder’s merchants and car dealerships have in common? Absolutely nothing, yet these three branches are united in the Finnish company K-Group or Kesko, a company with sales amounting to 8.6 billion euro and 20,000 employees in 2015. And just over half of those sales are pocketed via various supermarket formulas.
Although the group has branches in various European countries, the supermarkets can be found in just two countries, Finland and Russia. Approximately 900 branches are visited by about 900,000 consumers every day. The chain, built up by franchisers, has a market share of 33 per cent, and because of that, it is the second-largest supermarket chain in Finland. The Finnish retail market amounted to about 16.6 billion euro in 2015.
Local products
Four supermarket formulas and catering wholesalers fall into the supermarket category. Those parts together have sales amounting to 4.6 million euro. Local supermarket managers profit from, among other things, joint purchases and centralised logistics. However, the franchisers are given many opportunities to make their own decisions about the products on the shelves. They can adjust their shops to meet their customers desires. “Listening to the wishes of our local customers and using customer data, is how the franchisers build an assortment and services that meet customers’s desires,” according to Kesko in the annual report of 2015.
In addition to the standard assortment, each branch manager can also add local products to their supply. Online, the retailers work together again from one web shop. In that app, supply with specific promotions can be found per supermarket. In March of this year, the app had been downloaded 120,000 times. The Scandinavian country has approximately 5.5 million inhabitants. “It is not just about price, but also about quality and experience,” according to the annual report. With that thought in mind, Kesko dedicated itself to the Finnish food culture last year. For that, there is cooperation with suppliers to increase the supply of fresh, local products. As part of that, the Finnish agricultural sector was in the spotlight last year. About 80 per cent of the range is of Finnish origins.
Four formulas and a concept shop
The Kesko Group contains four shop formulas, which are very similar in name. The first is the K-city market. This formula consists of modern hypermarkets, in which there is plenty of space for local products. Eighty-one of these branches could be found all over Finland last year. A slightly smaller variant is the K-supermarket, which consists of 219 branches. This formula is distinctive in the market with large fresh departments and an educated staff. Finnish products are also important in this formula. K-market is Kesko’s neighbourhood supermarket. These shops are close to consumers and offer a versatile supply of daily necessities. By far the largest part of the branches fall within this formula: 476 shops, to be exact. The fourth shop formula is K-ruoka. These nine supermarkets can only be found in the St Petersburg region in Russia. In addition, this category of the K-Group also contains Kerpro, which is a Finnish wholesaler for the Finnish catering industry.
In November 2015, the company opened up a new shop in capital city Helsinki. This new shop does not fall into one of the previously mentioned formulas, but is a concept shop. New ideas for the shops are tested under the name K-Myllypuro. A cooperation between suppliers and customers exists for those new ideas, and together they have much influence on what the shop looks like. “We actively looked for influences and trends in international retail,” manager Jorma Ruahla said during the opening. “It is our goal to develop a new definition for supermarkets, and the tests we will do here are an important step for that.”
