Kesko

Kesko Corporation (Finnish: Kesko Oyj, Swedish: Kesko Abp) is a Finnish retailing conglomerate with its head office in Ruskeasuo, Helsinki.[3] It is engaged in the food trade, the home and specialty goods trade, the building and home improvement trade, and the car and machinery trade. It also has subsidiaries in Sweden, Norway, Estonia, Latvia, Lithuania, Russia, and Belarus.

Countries with Kesko
Kesko Corporation
Native name
Finnish: Kesko Oyj
Swedish: Kesko Abp
TypeJulkinen osakeyhtiö
Nasdaq Helsinki: KESKOB
IndustryRetail
Founded1940 (1940)
Headquarters
Helsinki
,
Finland
Key people
Mikko Helander (President and CEO), Esa Kiiskinen (Chairman)
ServicesSupermarkets and hypermarkets, hardware retail, auto sales, department stores, consumer durables, agricultural supplies
Revenue
  • €10.72 billion (2019)
  • €10.38 billion (2018)
  • €10.68 billion (2017)
  • €10.18 billion (2016)
  • €8.679 billion (2015)
  • €147 million (2016)
  • €195 million (2015)
  • €99 million (2016)
  • €102 million (2015)
Total assets
  • €4.408 billion (2016)
  • €4.139 billion (2015)
Total equity
  • €2.029 billion (2016)
  • €2.163 billion (2015)
Number of employees
22,476 (average, 2016)
Websitewww.kesko.fi
Footnotes / references
[1][2]
Former Kesko headquarters in Katajanokka, Helsinki, Finland

Business purpose

The key focus areas in Kesko's business operations are to strengthen sales growth and the return on capital in all divisions, to exploit business opportunities in e-commerce and in Russia, and to maintain good solvency and dividend payment capacity.

History

Kesko was formed when four regional wholesaling companies that had been founded by retailers were merged in October 1940.

The new Kesko company started operating at the beginning of 1941. The need to purchase goods for the shareholder-retailers and to support their business operations and start cooperation among them resulted in the forming of the K-retailer group.

By the end of the 1940s, Kesko's sales amounted to about 15 billion old Finnish markkas (equivalent to EUR 580 million in 2010), which was about 12% of the overall sales of the central companies operating in the Finnish trading sector.

Divisions

Food trade

Kesko Food is a key operator in the Finnish grocery trade. Kesko Food's main functions include the centralised purchasing of products, selection management, logistics, and the development of chain concepts and the store network.

Kesko Food manages the K-food store chains, which are K-Market, K-Supermarket and K-Citymarket. There were 937 K-food stores in Finland in 2012. The K-food store network is comprehensive in Finland and approximately 50% of Finns live less than a kilometre away from a K-food store.

Formerly Kesko called these four size-grades of their shops K (small), KK (middle-sized), KKK (large), and KKKK (largest),[4] and the chain names were K Extra, K Lähikauppa (= "local shop"), KK Market, KKK Supermarket and KKKK Citymarket; but this naming system has been changed.

Kesko Food's private brands include Pirkka, K-menu and Euro Shopper.

The main competitors are Prisma, S-market and Alepa/Sale of S Group, M chain stores, and Lidl.

Kesko Food's subsidiary Kespro is the leading wholesaler in the Finnish HoReCa business.

Kesko also has small convenience stores, cafes and restaurants which operate at manned service stations of Neste oil corporation. These service station facilities are branded as Neste K. The convenience store is virtually always found in Neste K station, while whether the station has a cafe or restaurant depends on the size and location of the station. Cafes are branded as Koon Kahvila and restaurants as Koon Keittiö.

Home and specialty good trade

The home and specialty goods trade comprises K-citymarket's home and speciality goods, Intersport Finland and Kenkäkesko.

Kesko's home and specialty goods trade operates in the clothing, home, sports and home technology product lines.

The most widely recognised chains are:

  • Intersport, the Finnish market leader in sports equipment.
  • Kookenkä and Athlete's Foot which are shoe retailers.
  • Hanakat, a HVAC and plumbing related products retail chain.

Building and home improvement trade

Rautakesko is an international service provider which retails building, renovation and home improvement supplies in Finland, Sweden, Norway, Estonia, Latvia, Lithuania, Russia and Belarus.

Rautakesko manages and develops the K-Rauta, K-maatalous, Byggmakker, Senukai and OMA retail chains and B2B sales in its operating area.

Rautakesko's main functions include the centralised development of chain selections, centralised purchasing and logistics, and the development of chain concepts and the store network.

All stores in Finland are owned by retailer entrepreneurs. There are also approximately 100 retailer-owned stores in Norway. Rautakesko's international business model combines the category management, purchasing, logistics, information system control and network improvements of the company's chains which operate in different countries.

Car and machinery trade

The car and machinery trade segment consists of K-Auto (formerly operated as VV-Auto) and Konekesko with their subsidiaries.

  • K-Auto imports and markets Volkswagen, Audi, Porsche, Cupra and SEAT passenger cars, Volkswagen commercial vehicles and MAN trucks & MAN and Neoplan buses in Finland, and it also imports and markets Seat passenger cars in Estonia and Latvia. K-Auto is also engaged in car retailing and provides after-sales services at its own outlets in the Greater Helsinki area and Turku. Besides vehicle import, K-Auto is divided into smaller separate business concept brands that operate under K-Caara subsidiary, these brands include for example K-CaaraDeal for private vehicle leasing, K-CaaraLeasing for business vehicle leasing and K-Lataus for electric vehicle charging facilities.
  • Konekesko is a service company specialising in the import, marketing and after-sales services of recreational machinery, construction and materials handling machinery and agricultural machinery. Konekesko operates in Finland, Estonia, Latvia, Lithuania and Russia. Konekesko arranges the manufacture of and sells Yamarin boats in Finland and exports them to several European countries and Russia.

K-Auto and Konekesko represent the leading brands in their market area and are responsible for the sales and after-sales services of these brands either through their own or dealer network. The dealer network is complemented by a network of contract service centres.

Market share and competitors

In 2014, Kesko's market share in food trade in Finland was 33.1% (Nielsen). At that point, Kesko's competitors in food trade in 2014 were S Group (45.7%), Lidl (7.6%), Suomen Lähikauppa (6.8%), and M chain stores (Nielsen). Kesko later acquired Suomen Lähikauppa in 2016 and the deal increased Kesko's share of the market to about estimated 40%.[5]

In 2019 Nielsen report, Kesko's market share was estimated to be 36.5%.[6]

Acquisition of Suomen Lähikauppa

In April 2016 Kesko completed the acquisition of a competitor Suomen Lähikauppa's stores. In the deal, Kesko acquired all the Valintatalo and Siwa stores. However the Finnish Competition and Consumer Authority (FCCA) approved the acquisition with a condition that Kesko must sell at least 60 of the stores to competitors. All the Siwas and Valintatalos have been rebranded as K-Market stores as of 2017.[7] The total number of stores owned by Suomen Lähikauppa before the acquisition was 643 and it employed 4100 employees.[8] In the same acquisition Kesko also was initially obligated to keep using Tuko Logistics Cooperative as the main supplier for the bought stores for 18 months, but FCCA later revoked this decision on appeal.[9]

Notable changes in company structure

Stores declared insolvent

Retail chain closures
  • Musta Pörssi home electronics retail chain[11]

Sales of retail chains
  • Asko and Sotka furniture retail chains[12]

References
  1. "Avainluvut". Retrieved 22 September 2018.
  2. "KESKOA, Kesko Oyj A, (FI0009007900) - Nasdaq". www.nasdaqomxnordic.com. Retrieved 22 September 2018.
  3. "Contacts/Kesko Corporation." Kesko. Retrieved on 6 May 2019. "Mannerheimintie 117"
  4. "Archived copy". Archived from the original on 2015-09-23. Retrieved 2015-09-23.CS1 maint: archived copy as title (link)
  5. "Archived copy". Päivittäistavarakauppa ry. Archived from the original on 2017-02-14. Retrieved 2017-02-13.CS1 maint: archived copy as title (link)
  6. "Päivittäistavarakaupan myynti ja markkinaosuudet 2019" (in Finnish). Retrieved 2020-11-22.
  7. "Kesko has completed the acquisition of Suomen Lähikauppa - Siwa and Valintatalo stores to be converted into K-markets". Retrieved 22 September 2018.
  8. "Archived copy". Archived from the original on 2017-02-14. Retrieved 2017-02-13.CS1 maint: archived copy as title (link)
  9. "FCCA removes Tuko-related conditions from Kesko Food and Suomen Lähikauppa merger decision". Kilpailu- ja kuluttajavirasto. Retrieved 22 September 2018.
  10. Anttila declares bankruptcy Helsinki Times. Retrieved on 11 September 2016
  11. Musta Pörssi to wind up operations Kesko website. Retrieved on 6 June 2019
  12. Kesko has completed the divestment of Indoor Group Oy responsible for Asko and Sotka Kesko website. Retrieved on 6 June 2019
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