Grocer Esa Kiiskinen named chairman of Kesko board
Growth potential seen in Russia
Esa Kiiskinen, who runs the Kontumarket in Kontula in the east of Helsinki, was chosen as the new Chairman of the Board of Directors of the Kesko trading sector company a week ago.
Kiiskinen, who has been a member of the Kesko board, is quite comfortable working on the floor of his shop, but he may have less time for it in his new post.
Kiiskinen is not planning any strategic revolutions for the company, as his thinking as been largely on the same lines as his predecessor Heikki Tamminen, who ran a hardware store affiliated with the Kesko.
“Kesko is such a big ship that one man cannot cause it to rock, and I don’t think that I need to rock it. If I did so I would admit that I have been making stupid decisions the past three years”, he laughs.
Kiiskinen sees his task as one of pushing forward the big decisions that have already been made by the board: the greater internationalisation of Kesko, developing electronic trading, and supporting healthy growth that is faster than the growth on the market in all sectors.
Growth that exceeds that of the market means that market shares need to be taken from competitors. Kesko lost its position as the main retailer of foodstuffs to the S Market Group in mid-decade.
Kiiskinen feels that increasing market share is no hocus-pocus.
“We need to play our own game in a way that pleases the customers. Commerce is a sector in which the customers give you what you deserve. The location of a shop is certainly important, and one needs to sense changes in customer behaviour. And in online trading we need to be in the right place at the right time.”
Kiiskinen also notes that one factor explaining the growth in sales by the S Group is corporate deals that were made.
He also observes that Kesko and the S Group, which is organised in the corporate form of a cooperative, is not quite at the same starting line in chain guidance. The individual owners of K stores are independent entrepreneurs who have to operate under restrictions on cooperation stemming from competition legislation. On the other hand, private store chains can make decisions in a centralised manner without restrictions.
Kiiskinen sees electronic trading as a big challenge to traditional commerce. Nobody really knows how consumer behaviour might change.
“Electronic buying is appropriate for booking tickets, household appliances, sporting goods, and the music business, but because of online trading, no sector, not even the grocery business, is safe from international competition. It is truly a big question.”
Another big issue for Kesko is Russia, where it has set up 15 large K-rauta hardware stores, 35 Intersport sporting goods shops, and a chain of grocery stores is being set up. Both Kesko and the S Group are seeking growth in Russia, as the limits of the Finnish market are in sight.
In Russia, Kesko will enter the grocery market with its Citymarket concept, involving hypermarkets selling food, as well as appliances, clothing, shoes, and other goods.
“Russia, and especially the St. Petersburg region, is an attractive market, but it is not easy to get into.”
Kesko in brief