Kesko reports strong FY2019 growth

Harriet Cohen
Senior Retail Analyst
@RetailAnalysis

Date : 05 February 2020

Finland-based Kesko reported sales through its grocery trade subsidiary rose 2.7% in total in 2019, to €5.5 bn. It said on a comparable basis, sales rose 3.2%, while its operating profit advanced by €33.4m to €327.9m for the year. Kesko highlighted how the results were driven by its continued adherence to the strategy it set out in 2015 ‘and its successful execution’.

Success ‘founded on good customer experiences…

Kesko said its performance had seen it grow ahead of the market and continue to see it gain further share. It said net sales grew across all its formats, while its grocery ecommerce sales ‘continued to grow strongly’. Kesko noted how owners’ implementation of new store-specific ideas had led to ‘better selections and services for… customers’, a development that it aimed to support further in 2020.

…Supported by its loyalty programme…

Kesko said its K-Plussa customer loyalty programme added 98,902 new households in 2019, taking the total to 2.4m households by the end of the year. Overall it said there were 3.5m K-Plussa cardholders in total. Kesko has been continually investing in the programme to offer shoppers further solutions through being a cardholder. In 2019 it enabled cardholders to see products’ carbon footprints.

…And further digitisation

Kesko noted the positive effect on its sales and profits through its ‘more extensive utilisation of technology and improved efficiency in logistics’. The use of data is becoming a key area for Kesko, which it is collecting through its loyalty card programme, and helping it and its store owners to create more personal customer experiences.

2020 outlook remains positive

Looking to the year ahead, at a group level, Kesko said it expects ‘the comparable net sales for continuing operations… to exceed the level of the previous 12 months’. In relation to the grocery business specifically it said ‘intense competition is expected to continue, but the market is expected to grow’. Given the positive operating environment and its settled and successful strategy, it is expected that Kesko will continue to drive sales during the year ahead.