Sweden vs. Finland - Comparison of the best stores
Grocery retailing is a business of big volumes. After the introduction of hypermarkets, the store units have become really big. The flip side of big volumes is that the profit margins tend to be rather small. Finland and Sweden are similar grocery markets with big retailers and stores.
We decided to find out how the biggest Kesko and ICA stores perform. Since there is no public access to store-specific data from other grocery chains, we compare only Kesko and ICA stores.
Some differences
Compared to Sweden, in Finland, it is quite common to have two big hypermarkets next to each other in a big shopping centre. Does this impact the store's profitability compared to stand-alone stores?
The answer seems to be that the profit level is lower in those stores facing a competing hypermarket. Competition seems to lower profits, hence lowering the prices customers pay.
One can see from the image how three K-Citymarket stores have significantly smaller profitability than the others. Each of the three stores is the only one among K-Citymarkets, which are located in a big shopping centre next to a competing Prisma hypermarket.
ICA Maxi Haninge, the biggest in Sweden
In Sweden, one store exceeds the magical one billion Swedish crowns turnover threshold. This store, Ica Maxi Haninge, has a pretty good profit level of 4,57%.
However, the best profits in terms of EBITDA percentage are from ICA Maxi Umeå and ICA Maxi Borlänge, both exceeding over ten per cent profit level. This is something rarely seen in the grocery sector. This kind of profit level is extremely high. Needless to say, ICA Maxi Umeå and ICA Maxi Borlänge don’t have competitors nearby.
Finland, KCM Kupittaa is the biggest
In Finland, the biggest profits and sales can be found in K-Citymarket Kupittaa, in Turku. With a turnover of over 86 million euros, the store profit stands at the strong level of 7,9%. The shopkeeper of K-Citymarket Kupittaa, Hannu Aaltonen, is known for his skills in growing sales and profits. He has been doing business as a K-CItymarket shopkeeper since the early 1990s.
The main differences between Finland and Sweden are threefold.
the sales and profit levels in Sweden are higher than in Finland
shopping centre locations have a big influence on profitability in Finland
the drop in sales from the biggest to the tenth biggest is steeper in Finland
Sources:
Finder.fi
allabolag.se
https://www.fri-kopenskap.se/article/view/878513/maxilistan_butiken_med_hogsta_vinsten_fokuserar_pa_volym_man_maste_vaga_trycka_pa?token=0ymdloaru8i0rf2gmnpcdf0vfh8qxrko