Kesko Food to cut 160 jobs in Finland

Duplicated work to be eliminated, chain operations to be streamlined

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In response to tougher competition and a shrinking market share in the grocery business, Kesko Food is implementing a number of measures aimed at streamlining its operations. The company announced on Wednesday that it would eliminate duplicated work, and concentrate more of its operations on its chains of food stores.
      The measures, which will lead to the loss of 160 jobs, are aimed at achieving savings of more than EUR 20 million a year.
     
The greatest personnel cutbacks will be in the Tampere logistics centre, whose operations are to be moved to Vantaa.
      Jobs will also be cut at the company's head offices in Helsinki. Chain marketing activities are to be moved to a single location, under a single management.
      The logistics and purchasing of home and specialty goods for the City Market chain is also to be reorganised.
     
Terho Kalliokoski, who begins as President of Kesko Foods from the beginning of May, says that the main aim is to boost the competitiveness of the company's food stores.
      Kalliokoski says that in the future, all of the company's activities are to support the chain operations. Therefore, only those jobs which generate value-added will be undertaken in a centralised manner outside the chain structure.
      Retailers affiliated with Kesko will be offered new contracts. In the new agreements, the fees paid by the owners of Kesko stores will no longer be based on turnover, but on gross margin - a move which is expected to encourage price competition.
      The company also plans to increase the common selection of the chains and to increase the use of uniform pricing. 


Links:
  Press Release: Kesko Food to improve operational efficiency and reform the organisation

Helsingin Sanomat