RUSSIA: Kesko starts food chain in St Petersburg

By Michelle Russell | 7 December 2012

Finland-based retailer Kesko has opened its first food store in Russia in the city of St Petersburg.

Kesko said the opening is part of its strategy to open four large food stores in the St Petersburg region by the end of 2013. The retailer said it plans to continue to expand in the region and later in Moscow, with the aim of achieving "sales of EUR500m (US$645.7m) and a positive result" by 2017.

Kesko Food's president Terho Kalliokoski said the initiation of its K-Ruoka business operations in Russia has "proceeded as planned".

"Many people in St Petersburg are familiar with the K-symbol, which stands for Finnish origins and quality," he said. "The store focuses on high-quality fruit and vegetables, bread and extensive service counters for meat, fish and prepared foods, plus an in-store scratch bakery."

Kesko also operates 14 K-Rauta stores and 31 Intersport stores in Russia.

The store has a sales area of around 5,000sq m, and according to Kari Heiskanen, Kesko's VP for store site operations in Russia, the presence of its existing store chains in Russia "allows resources to be centralised and efficiency of operations" when acquiring and building store sites.

Kesko operates around 2,000 stores across Scandinavia, the Baltic states and Belarus.

In addition to the first K-Ruoka store, Kesko has 14 K-rauta hardware stores and 31 Intersport stores in Russia.

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Kesko's first food store opened in St. Petersburg

 05/12/2012

Popularity among customers exceeded all expectations when Kesko Food opened its first food store in Russia in St. Petersburg on 5 December 2012.

Kesko Food aims to open four large food stores in the St. Petersburg region by the end of 2013 and continue expanding in the St. Petersburg region and later also in the Moscow region. The aim is to achieve net sales of €500 million and a positive result by the year 2017. Kesko has also 14 K-rauta stores and 31 Intersport stores in Russia.

According to Kesko Food's President Terho Kalliokoski, the initiation of business operations in Russia has proceeded as planned. The brand in food retailing is ?-????? (K-Ruoka), which indicates high-quality food and wide selections. "Many people in St. Petersburg are familiar with the K-symbol, which stands for Finnish origins and quality. In connection with the opening, we are launching the K-plus loyalty card, which will also provide customers with benefits from K-rauta stores and Intersport stores in Russia."

"The store focuses on high-quality fruit and vegetables, bread and extensive service counters for meat, fish and prepared foods, plus an in-store scratch bakery. Daily shopping is also easier thanks to a wide range of beauty care items, children's clothing and toys," says Oleg Buyalski, General Director of Kesko Food Rus.

General Director Oleg Buyalski joined Kesko in 2011 after having held various managerial positions in two of the largest hypermarket chains in Russia - Lenta and the French-owned Auchan - for over 10 years and having been employed before by international suppliers operating in Russia. Other members of the Management Board also have wide experience of working for large retail companies operating in Russia, such as O'Key, IKEA and Auchan.

The first K-Ruoka is located in Primorski, a fast-growing district of over 400,000 inhabitants, at Planernaya Ulitsa 17. The store has good connections and is close to built-up areas. According to Buyalski, store location is of great importance in Russia, too. The store with sales area of about 5,000 m2 operates in a property owned by Kesko, where customers are also served by a cafe, a pharmacy (Yliopiston Apteekki), a florist and four other firms. There is a car park with more than 400 spaces on the site.

Kesko is gaining synergy benefits when doing business through several chains in Russia. According to Kari Heiskanen, Kesko's Vice President responsible for store site operations in Russia and Kesko Food's Country Director for Russia, the fact that Kesko has several store chains in Russia allows resources to be centralised and efficiency of operations for example when acquiring and building store sites.

Original source: Kesko

Sectors: Emerging markets, Retail

Companies: Kesko

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