Kesko's year 2007

8
Kesko's year 2007
Operating
environment
Trends in the trading sector
●●
Internationalisation continues in
the trading sector.
●●
Importance of customer loyalty is
increasing.
●●
Consumers’ purchasing behaviour is
becoming fragmented; consumers seek
simplicity, experiences, a healthy way
of life and variation.
●●
Corporate responsibility and ethics are
emphasised.
●●
The manufacturing industry’s brands
remain strong.
●●
The number and market share of store
private label products are increasing.
●●
Use of the Internet and online sales are
growing.
●●
The trading sector’s role as a producer
of services is strengthening.
●●
New store concepts are being developed.
●●
New operations control systems improve
the efficiency of store operations.
Sweden
9.1 million
consumers
Norway
4.6 million
consumers
●●Building and home
improvement trade
●●120 K-Group
stores
Belarus
9.8 million
consumers
●●Building and home
improvement trade
●●3 K-Group stores
Sources: Nordea and Statistics Finland
●●Building and home
improvement trade,
technical trade
●●19 K-Group stores
Market areas
Kesko’s main operating areas are Finland,
Sweden, Norway, Estonia, Latvia, Lithuania,
Northwestern Russia and Belarus.
Strong growth, about 4.0%, continued in
the Finnish economy in 2007. However,
growth slowed down towards the end of the
year. Private consumption continued to grow
briskly, by some 3.7%, but consumer confidence
in the economy dropped during the latter
half of the year. The Finnish economic
growth is expected to slow down to some 2.6%
in 2008, mainly due to a decline in export
demand. Private consumption is estimated to
increase by around 3.0% and investments by
about 3.6%. Consumer prices are expected to
rise by 2.7%. Housing production is expected
to decline in 2008.
The Swedish economy is expected to grow
by 2.1% and private consumption by 2.7% in
2008. Consumer prices are expected to rise by
3.2%.
The Norwegian economy is estimated to
grow by 2.9% and private consumption by
3.0% in 2008. Consumer prices are expected
to rise by about 3.3%.
The growth of the Estonian economy is
expected to slow down in 2008 and remain at
about 4.0%. Private consumption is estimated
to grow by about 6.0%. Consumer prices are
expected to rise by 7.9%.
The Latvian economy is expected to grow
by 5.6% in 2008. Private consumption is
anticipated to slow down slightly and remain
at around 7.0%. Consumer prices are
expected to rise by 12.0%.
The Lithuanian economy is expected to
grow by 7.4% in 2008. Private consumption is
anticipated to continue growing with a rate of
around 14.0%. Consumer prices will rise by
about 7.0%.
In Russia, growth in private consumption
varies strongly from one region to another;
the average growth rate is estimated to be
about 7.0% in 2008. Private consumption is
anticipated to grow by 10.0% and investments
by 21.0%. Consumer prices are expected to
rise by 12.0%.
Trends in the market areas of each division
are discussed in division-specific
presentations.
Finland
5.3 million
consumers
The Baltic
countries
7.2 million
consumers
Russia
St. Petersburg 4.6
million. Moscow
10.4 million
consumers
●●All Kesko’s
divisions
●●1,850 K-Group
stores
●●Building and
home improvement,agricultural,
machinery
and technical
trade
●●Furniture trade
and Anttila
distance retail
sales (Estonia
and latvia)
●●52 K-Group
stores
●●Building and
home improvement
trade,
technical trade
●●8 K-Group
stores