Kesko's year 2007

6
Kesko's year 2007
Review by the
President and CEO
Increasing Kesko’s shareholder value requires
healthy growth in sales and profit. The
K-Group stores offer the best quality, the most
comprehensive selections and the best service
at competitive prices. Kesko and the
K-retailers daily serve about one million customers
in nearly 2,000 stores. We want to
exceed our customers’ expectations every day.
The Kesko Group’s nine per cent sales
increase in 2007 and our record profit level
show that the strategy we have chosen is
soundly based and that its implementation is
progressing well.
Measured by retail sales, the K-Group is
Finland’s biggest trading sector company
whose main businesses are the food trade and
the building and home improvement trade. In
2007, we strengthened our position both
domestically and internationally.
The retail sales of our building and home
improvement stores increased significantly
in 2007, especially in Russia and the Baltic
countries. The profitable growth recorded particularly
in foreign operations encourages us
to expand in Russia and our other countries
of operation, and to commence the building
and home improvement trade in new
countries.
Kesko Food’s positive sales and profit performance
continued in 2007. The K-retailers’
professional skills and commitment to common
objectives provided a strong foundation
for efficient cooperation and improved competitiveness.
Investments in the retail store
network will rapidly increase sales in the
coming years. Kesko Food is continuing to
actively seek opportunities to expand operations
to Russia and the Baltic countries.
The main factor behind Kesko’s record
result was that almost every profit centre of
the Group improved their profits or were able
to maintain them at a high level. The biggest
improvements were recorded by Kesko Food
and Rautakesko.
The Group strategy emphasizes healthy
focused growth, sales to consumer-customers,
and services, combined with responsible and
cost-efficient business models. Kesko has
dozens of successful product and chain
brands. In order to strengthen the position of
our brands we introduced an extensive brand
strategy initiative. This was complemented by
the establishment of a steering group chaired
by the President and CEO and composed of
Kesko staff representatives and external
members.
Customer loyalty is becoming increasingly
important. Through our customer loyalty programmes
and various forms of customer communication,
we strengthen our service capability
and customer satisfaction. We initiated
a reform of the K-Plussa customer loyalty programme
and an online customer communications
project. The new K-Plussa card gives our
customers more benefits than before and
access to a combination of payment features.
The reformed Pirkka magazine was positively
received by our customers.
Efficient use of modern information technology,
increasing store sizes, labour shortages
and soaring costs require that we constantly
develop our operating processes. The
objective of the work and productivity programme
we launched in the Kesko Group and
the K-stores is to significantly improve our
service and price competitiveness.
Customers expect companies to operate in
an increasingly responsible way. Kesko’s longterm
responsibility work once again received
world-wide recognition last year. For the third
year in succession, we were included in The
Global 100 Most Sustainable Corporations