Medium-sized stores crushed by hypermarkets
Large supermarkets rake off 80 percent of food sales
Year after year, large supermarkets have increased their share of the current consumer goods trade. The largest of them, the so-called hypermarkets, have increased their sales by 3.2 percent this year, while large supermarket sales figures have risen by 3.6 percent.
The large outlets' share of the EUR 11 billion current consumer goods trade is now as much as 80 percent.
A fifth of Finland's current consumer goods are sold in just 100 hypermarkets.
An ever-present price war with deep margin cuts has driven foodstore and current consumer goods chains to seek improved efficiency through increased size of outlets.
In a serious quandary are now the traditional medium-size full-range stores and supermarkets. The Kesko and Spar chains, for example, have quite a few outlets of this size run by storekeeper entrepreneurs.
Despite the fact that stores of under 400 square metres floor-area are allowed to do business on Sundays as well, their cut of the CCG trade continues to decrease.
Competition on beer and milk prices in particular has exhausted medium-size stores.
By way of a trial, Kesko Food has turned 11 of its supermarkets into discount stores. According to Kesko Food managing director Kalervo Haapaniemi, business in these Cassa stores is flourishing.
"I have a feeling that in the near future we will have to transform even more supermarkets that are nearing the end of their life cycle into Cassa discounters."
In Finland the price war accelerated after the landfall of the German discount store chain Lidl.
Now Lidl has 70 stores in Finland, with an estimated market share of almost two percent.
The largest retail chains, Kesko and the S Group, have estimated market shares of 35.8 and 33 percent respectively.
Kesko has the most hypermarkets. Its Citymarket chain posted sales of around EUR 1,000 million last year. Competitors the S Group also reached the EUR one billion mark with its 41 Prisma hypermarkets.
This year Kesko has introduced yet another Citymarket, whereas the number of Prismas is now up to 44.
The latest addition to the S Group's Prisma chain was opened in Espoo's Olari suburb on Thursday. This is the tenth Prisma hypermarket in the capital area, where there is more purchasing power than elsewhere in the country.
The smallest stores, those with a sales area of less than 100 sq. metres, also seem to be thriving. Their sales have increased by five percent from last year.
Their strong suit is that in addition to staple foodstuffs they also sell prepared food. Furthermore, they stay open late and on Sundays as well.
Helsingin Sanomat
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| 17.9.2004 - TODAY |
 Medium-sized stores crushed by hypermarkets |
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