Has S-Group overtaken Kesko as the biggest online grocer?
Lately, there has been a lot of news about online grocery retailing in Finland. A recent article in Helsingin Sanomat and an announcement by S-Group indicate the competitive situation both in the national setting between Kesko & S-Group and in the Helsinki metropolitan where Oda has entered the market.
Is S-Group the biggest nationally?
Kesko has been the most prominent online grocer since the big acceleration during the pandemic in 2020. Last year S-Group grew faster but was unable to reach Kesko, which started to plateau after the rapid growth.
In 2022 Kesko reported that its online grocery revenues had declined by -7,9% during the year's first half. Based on the 244 M€ in revenues last year, the decline would Kesko's revenue somewhere between 92 M€ and 112 M€, depending on how much more weight one gives to the Christmas revenues for the online channel.
On a yearly estimation, Kesko's online revenue run rate for 2022 would drop to around 225 M€.
At the same time, S-Group announced that it has been able to grow its online grocery sales by 10%. Last year S-Group reached nearly the same level of online sales as Kesko trailing only slightly. One could estimate that S-Group's online revenue was 240 M€ in 2021.
With a 10% increase in the 2021 revenue, S-Group's annual run rate for 2022 would be around 265 M€.
The estimate is naturally susceptible to many changes, but this is how things seem to be before the all-important run-up to Christmas.
How about the Helsinki region?
Nationally Kesko and S-Group are the most prominent online grocers in Finland. However, the picture changes when focusing on the Helsinki region. Oda has arisen rather rapidly to challenge the two giants.
On the overall online volume of weekly orders, Kesko and S-group (HOK Elanto) are still significantly bigger in Helsinki. The store-based giants are pushing customers (with pricing and amount of delivery windows) more and more to the Click & Collect model. It is a model which does not scale well.
The power balance between the online grocers changes when looking at the home delivery part (the only model offered by Oda).
For home deliveries, Oda is rapidly catching up with Kesko and HOK Elanto. Oda's fast growth in home deliveries is quite significant when one considers that the grocer has reached this level in less than a year.
More significant changes in grocery purchasing habits always take time. If Oda can keep up the rate of growth they have had so far in five years, it will have a significant portion of online groceries in the Helsinki region.
NOTE: The numbers that the retailers have given out are the numbers of deliveries. They give only an indication of the total size of revenue for each retailer. The average order sizes vary between the retailers, with big retailers probably having significantly bigger average order sizes than Oda because of their higher fees and more extensive assortments.