Store visit: K-Supermarket Lippulaiva
by Niklas Salminen (Linkedin)
The latest store visit was done in a recently opened shopping centre Lippulaiva, located in Espoo. Inside the shopping centre there are four grocery stores: Prisma (the market leader), Lidl (market share 10%) and K-Supermarket (part of Kesko with 37% market share). Additionnally to that there is also a small format Kesko store K-market which is run by the same shopkeeper as the K-Supermarket.
Kesko stores are interesting, because of the business model where the shopkeeper runs a sort of franchising operation with Kesko providing the logistics, majority of the sortiment and centralised marketing. The shopkeeper is left with quite a lot of freedom in building the store concept and adding products that fit with the customer profile in the surrounding catchment area.
Spacious entrance with sushi
The supermarket entrance is spacious and can be spotted from a distance. A smart move is having the sushi counter located next to the entrance for the busy lunch customers. When we visited the store it was early morning so the stocking up was still in progress.
Despite this the fruit and veg department looked clean, clear and tempting. The department itself did not offer any big surprises, but was maintained well.
Noteworthy was that the store had bought an apple juice machine as well as having the normal orange juice machines.
The store has many destination points targeting on doing things differently and/or better than its rivals. One of these destination points is the stores own pasta factory where they produce their own pasta. Later on they are planning on adding self made portions with sauces but now it is only pasta.
The second important area of interest in the store is the outsourced Maxin kala (Max’s fish) which is an entrepreneur run fish counter. What adds to the value is the strong commitment to fish with different processed fish products and hand sliced gravad lax.
The counter itself is mostly topped up on Wednesdays and Thursdays in order to have the fish as fresh as possible during the peak sales days on weekend.
This is well explained to us by the shopkeeper, but it might be wise to enhance the message to customers as well for them to know why the selection is narrower on the first days of the week.
Assortment: the competitive advantage
When asked what is the competitive advantage the store holds against the market leader Prisma, the shopkeeper replies immediately: the assortment.
He claims that the store holds more products than Prisma. As is well known, the Kesko shopkeepers are quick in answering the customers on any new product wishes.
The hard part for K-Supermarket is to get the message of the wider sortiment to customers as the image is that Prisma holds a larger assortment.
The wide selection can be easily spotted on the beer isle. The store has a large amount of small breweries and which strikes the beer lovers, most of them are chilled.
Leipomo Juuri as a differentiator in bakery?
Next interesting touchpoint in the store is the in store bakery. Finnish super and hypermarkets usually have a Fazer bakery inside the store, so the shopkeeper in Lippulaiva decided to have an alternative solution.
Together with bakery Juuri the store has developed a concept of an in-store bakery where the bakery brings half of the sales in the bread category and the majority of the profits.
The number is really high, usually a Fazer operated in store bakery brings about 35 % - 45 % of the bread category sales.
The concept is also nice with clear view on how there is real people actually baking in store.
Responsibility
Corporate responsibility is a topic which many retailers pay careful attention as it is increasingly important for the customers. Kesko claims to be “the most responsible grocer”
In Lippulaiva one great way of highlighting responsibility is the “last chance” shelf, where the customer can buy products near their expiration date. This is an excellent and concrete way of showing responsibility. Of course the store also benefits from selling the products instead of having them on wastage.
The “last chance”- counter gives the customer a sense of treasure hunt and surprise in their shopping trip.
Lastly next to the tills the stores own popcorn machine gives a nice retail theatre feeling with popcorn scent inviting to buy. The popcorn is to attract the younger customers and the price difference compared to cinema popcorn is huge in favour to K-Supermarket. Also the wastage from the machine is really small as a bag of popcorn doesn’t cost much.
K-Supermarket Lippulaiva is a store worth visiting and the shopkeeper Juuso and his team have a tenacious vision to make the store one of the best in Finland.
