Home and speciality goods trade - Kesko

1 

Home and 

speciality goods trade 

Capital Markets Day 2012 

Minna Kurunsaari

Kesko’s home and 

speciality goods trade 

Retail sales 

Contribution to 

Kesko’s net sales 

31 Dec. 2011 

€1.7 bn 

16% 

Operating profit 

Contribution to Kesko’s 

operating profit 

31 Dec. 2011 

€37 million 

13% 

Total of 443 stores, 11 online stores in 13 different chains 

2 Minna Kurunsaari Home and speciality goods trade CMD 2012 

Finnish market of home and speciality 

goods, 2011 

Total market of home and speciality goods, 

11.7 billion euros, incl. VAT

Retail sales of home and 

speciality goods chains 2011 

M€ (incl. VAT) 

Taxable sales 

2011 

Change, % Number of stores 

2011 

K-citymarket, home and speciality goods 770 4.5 75 

Anttila department stores 331 -8.1 30 

Kodin1 163 1.3 11 

NetAnttila 90 -9.2 1 

Intersport 237 -6.1 56 

Kesport 29 -6.2 32 

Budget Sport 39 4.8 8 

Asko 112 14.4 32 

Sotka 126 19.8 49 

Musta Pörssi 96 -26 32 

Konebox 17 -0.5 3 

Andiamo 17 -9.1 12 

K-kenkä 29 -4.5 37 

Kenkäexpertti 8 -11.7 23 

Home and speciality goods stores, Finland 2,064 -1.3 400 

Anttila, Estonia (NetAnttila) 10 1.3 

Indoor, Baltics 9 12.5 7 

Intersport, Russia 8 36 

Home and speciality goods, other countries 27 43 

Home and speciality goods, tot. 2,091 -0.5 443

All chains operate online stores 

and e-services 

4 

2011 2012 2013 2014 

Minna Kurunsaari Home and speciality goods trade CMD 2012

Strategic focus areas and key projects of 

home and speciality goods companies 

• Implementation of the customer driven competition strategy of K-citymarket home and speciality 

goods 

– Food trade’s attraction and shared customer relationships must be leveraged 

– citymarket.fi 

• Anttila department store’s customer driven competition strategy 

– Anttila as the whole family’s department store 

– Multi-channel approach 

• In Kodin 1’s development, brands in significant role 

• K-citymarket Oy’s and Anttila’s shared processes and resource planning system, as well as the 

companies’ merger; 2013-2014 

• Reform of the Musta Pörssi concept and operating system making them competitive and supportive of 

customers’ shopping behaviour 

• Intersport and Budget Sport chains’ expansion and preparing for emerging new international 

competition 

• Implementation of Russian Intersport concept’s attractiveness and competitiveness 

• Continuing Asko’s and Sotka’s market leadership and strong profitability 

• Leveraging Kookenkä store type reform in the improvement of sales and profit 

5 Minna Kurunsaari Home and speciality goods trade CMD 2012

Strategic focus areas and key projects of 

home and speciality goods companies 

• Implementation of online stores and electronic shopping 

– Online stores to all chains 

– E-services and customer analytics to play a significant role in business 

operations 

– Examining a shared solution for product information and supplier 

integration 

• Implementation of sales and profitability programmes in every company/chain 

– Expenses in relation to net sales reduction target below 2 % 

• Critical assessment of capital expenditure in store sites 2012-2014 

– Significant reduction 

• Logistics solutions of home and speciality goods and examining the 

expansion of the logistics centre in Kerava 

6 


7 

K-citymarket and Anttila 

Minna Kurunsaari Home and speciality goods trade CMD 2012 

kodin1.com

Separate concepts to customers – efficiency is generated 

by joint sourcing and resource planning system 

1. Building 

customer driven 

concepts 

3. 

Implementation 

of competitive 

advantage 

departments 

5. Development 

of own brands 

7. New management 

system, integration 

and improvement of 

competitiveness 

8. Financial indicators 

and capital 

expenditure 

8 

Home Leisure 

Clothing 

Cosmetics& 

household goods 

citymarket.fi 

Brand 

Service 

Own brand 

2. Customer 

information and 

customer 

relationships 

guide operations 

4. Digital strategy 

and e-commerce 

definition and 

implementation 

6. Responsibility 


Home Beauty 

Fashion 


Service 

TopTen 


Shared sourcing and delivery 

processes 

Management model, management system 

Shared information systems 

Furniture 

kodin1.com 


Home 

netKCM.com 

TopTen 


Service

Integration of K-citymarket Oy and Anttila 

• Combined sales €1.1 bn 

• Number of personnel around 7,000 

• Large unit with sufficient resources for 

developing operations 

– Online services 

– Leveraging customer information 

– Own brands 

• Development of online stores using a 

shared platform and background processes 

• Combining sourcing volumes 

– combined purchases €750 million 

• Mutual positioning of concepts and 

systematic development 

9 



K-citymarket

K-citymarket concept’s key policy definitions 

• Customers perceive K-citymarket as an entity and the development of the 

K-citymarket concept is carried out in cooperation with K-citymarket food 

• The level of K-citymarket’s home and speciality goods departments will be 

raised 

– Selections, displays and service level in conformity with the department’s 

customer promise 

• The development of K-citymarket home and speciality goods and its 

departments is based on customer relationships established through 

groceries 

• K-citymarket Oy provides best customer service in hypermarket category and 

the share of personal selling will be increased 

• Centralised sourcing and selection management enable low purchase prices 

• Electronic media generate savings on marketing costs 

• Concept implementation is systematically monitored and audited 

11 


Anttila department stores 


Sales of traditional department stores decline 

13 

Development Launch Growth Saturation Decline 

E-commerce 

Convenience 

store 

Hard discounter Supermarket 

Category Killers 


Hypermarket 

Anttila department store concept must be redefined in 

order to turn attraction and sales up. 

Dept.stores

Changes in competitive situation of department 

store concept 

14 

Dept. stores 

Suppliers’ 

own stores 

and 

e-commerce 


Discounters 

HYPERMARKETS 

HOME AND SPECIALITY GOODS 

Modern speciality 

trade, dept.stores 

- global chains 

- Category Killers

Anttila department store brand clarification 

• Anttila department store to attract the whole family 

– Wide selections of home products, everyday fashion and 

entertainment affordably for the whole family 

– Main target group adult women aged +30 – 50 years and adult 

families who appreciate classic and trendy quality products 

• NetAnttila and Anttila department stores support each other and offer 

services and seamless customer experiences 

– Online store selection to be increased 

(from 20,000 to 50,000 by 2015) 

• Different stages of customer’s buying process and customer information 

guide marketing 

• Gradual transfer from mass marketing to targeted electronic marketing 

• New profitable growth areas are sought 

15 


Kodin1 department stores for home 

goods and interior decoration 


kodin1.com

Brands to be strongly involved in 

Kodin1 concept development 

• Building a brand strategy to support Kodin1 concept development 

• New cooperation models and strategic partnerships 

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– Services supporting Kodin 1 concept located in store entrance areas. 

E.g. home security services, kitchen design services 

– Examining Shop in shop solutions. E.g. Musta Pörssi, Marimekko 

– Best brands’ visibility is strengthened with selection definitions and 

display instructions in all departments . 

– Strategic partnership programmes with key operators, such as Iittala, 

Arabia, Hackman, Fiskars 

– Increased share of own brands in selections 



5.12.2012 

Intersport Finland

Increasing retail sales and maintaining excellent 

operating profit level as key objectives 

• Intersport online store opening in 2013 

• Organic growth and five new stores in 2012-2014 

• Development of customers’ e-services 

– New services ”ski packaging machine” 

– Order collection possibility from BS stores 

– Intelligent product pick-ups, chat 

– Intersport Club, Some 

• ’Sport To The People’ concept expansion 

• Increase and development of selections 

– International development programme for supply chain management 

– Increased share of own brands in clothes 

– Doubling the selection offered online (total of about 7,000 products) 

• Higher leverage of analytics and customer information 

• Implementation of cost saving programme 



Intersport Russia

Sports trade market growth 

7-10% 

• GDP growth in 2012 estimated at 3.5% 

• Sports trade market in 2012 €4.5 billion 

• Sports market still focused on clothing and fashion 

• Sportmaster and Adidas market leaders. Both with a 

market share of 25% 

• Market structure: 

– Monobrand (Adidas, Nike, Puma) stores’ 40% 

market share 

– Multi sport/Generalist stores’ 30% market share 

(Sportmaster, Intersport) 

– Market share of sport specific specialised trade 30% 

• Market growth in 2012 estimated at 7-10%. 

• Growing share of sports enthusiasts in crucial role 

– In 2012, 16% of population estimated to take physical 

exercise 

– According to the most optimistic estimates, the share of 

enthusiasts will reach 30% by the end of 2015 


Key objectives for 2012-2015 

• Operations under Intersport Finland’s strong control 

• Implementation of profitable store concept 

• Enhanced business operations 

– Organisation, network, inventories, Kesko synergies 

• Intersport’s objective is to achieve net sales of €50 million in 

Russia by 2015 

• Expansion, as soon as concept is competitive and profitable 

• Principal market areas St. Petersburg and Moscow 



5.12.2012 

Asko and Sotka

Maintaining Sotka’s and Asko’s 

strong profit-making capacity 

• Strategic objectives include customer satisfaction growth exceeding 

that of competitors, ensuring the chains’ strong market shares, and 

establishing Indoor Group’s profit at an excellent level (operating 

profit over 7%). Competitors’ difficulties have emphasized the 

chains’ reliability and competitiveness. 

• Intensive development of chains’ e-services guiding customer 

behaviour 

• Development of selling competence to increase average 

purchase amount and hit rate 

• Sotka and Asko online stores (Sotka in 2013, Asko in 2014) 

• Asko Bonnell mattress store concept in Kuopio 

• Leveraging analytics and customer information 

• Increased share of electronic marketing in budget 

• Strengthening the brand of Asko’s own sofa factory 

• Reducing the number of suppliers and 

centralisation of purchases 




Musta Pörssi

mustaporssi.fi to be established as Musta 

Pörssi’s primary customer channel 

• Foreign and electronic competition has hit home technology trade the 

hardest 

• The aim is to establish an online store to serve as the primary customer 

channel, supported by a limited network of 3-8 stores at shopping 

centres and strong retail clusters 

• Testing the efficiency and profitability of new store concept 

– Single-owned operating model 

• Change in Musta Pörssi chain’s retailer business model 

• Sourcing and logistics cooperation with K-citymarket Oy/Anttila 


27 


Kookenkä

Leveraging the new Kookenkä 

concept on a full scale 

• Opening and development of online store 

• Increasing the role of electronic marketing 

• Further development of the Koo Club customer loyalty 

programme 

• Leveraging analytics 

• Increasing the share of own brands 

• Reducing the number of business partners 



Minna Kurunsaari Home and speciality 

goods trade CMD 2012 

Thank you! 

29

Home and speciality goods trade - Kesko

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