Why not, if they are on pallets or otherwise collectable/automatically processable in modular units? If not, then of course not.
It seems to still be the case, as per my own experience from about 15 years ago, that automation progresses by product category. The collection of sales units in groceries can also be done automatically, but it seems to still be rare, e.g., due to reliability issues. Additionally, at least in the food sector, especially in the fresh produce (HeVi) side, visual quality control is still needed. Pallet by pallet and box by box, on the other hand, has been collected automatically for decades.
Edit: This is only loosely related to Kesko, if at all.
The schedules finally aligned, and we got Sami Kiiski, Keskoâs Divisional Director for Building and Technical Trade, for an inderesTV interview.
Topics:
00:00 Introduction
03:19 Geographical expansion
04:27 Onninen and international growth
06:17 âThe market has been very difficultâ
07:40 Acquisitions in practice
13:45 K-Rautaâs and Onninenâs growth opportunities in Finland
17:24 Onnela â Keskoâs largest construction project in history
18:20 âOnnelasâ and investments in other markets
19:57 Digitalization and multichannel sales
21:05 Factors improving profitability
24:37 âI believe this will become Keskoâs largest divisionâ
Keskoâs acquisitions, totaling 1.3 billion euros in turnover reported for 2023-2024, with some occurring at the beginning of the current year. Not many Finnish companies can boast such growth investments. Kesko is preparing well for market recovery, provided there is profitability and the integrations of the acquired businesses are completed.
Kesko is the largest operator in Finland in terms of security of supply, covering everything from foodstuffs to hardware products. If we consider that Europeâs rearmament, which is now beginning, is underway, then Kesko also benefits from the mandatory security stockpiling of equipment and foodstuffs. Thatâs true, but I donât want to create unnecessary fear. Everything will likely happen according to plans that have been known for a long time.
An interesting stock market day for Kesko. Is it that when âdistressâ comes, people turn to Kesko, or is it that there are now clear indications of recovery in the construction sector? Even the revitalization of the housing market benefits Kesko. It doesnât necessarily require a bathroom or sauna renovation, but rather a slight sprucing up of the apartment, i.e., decorating. This is a clear positive, because these interior decoration items can be found at K-Rauta at the same time when renovations are being considered. So even if a renovation isnât done, interior decoration items surprisingly get picked up.
In June, Kesko announced a matter that could mean significant additional sales as reconstruction inevitably approaches. Onninen has also reported good growth in Poland.
âKesko opened a Ukrainian-language construction e-commerce store in Poland â âOne day Russiaâs war of aggression will endââ
The majority of e-commerce orders remain in Poland, but deliveries have already been made to Ukraine. According to surveys by the Federation of Finnish Enterprises and EastCham, Finnish companies are willing to participate in the reconstruction of Ukraine.
That Ukrainian-language online store was indeed announced in June, but the year was 2023. Some language version of an online store is, in my opinion, pretty much a non-story.
And unfortunately, we are very far from a situation where Ukraine would begin to be massively rebuilt. And even further from a situation where Kesko would be a significant player in that process.
The Polish business certainly looks good. With or without a Ukrainian-language online store.
Oops, wrong year, but Onninen is indeed doing well. The Ukrainian-language online store will surely promote trade. Typically, in the construction industry, people have a slightly shorter education and weaker language skills, making it easy to buy from a website in their own language. This way, Kesko/Onninen makes it easier for Ukrainians in their purchasing decisions. Currently, Ukrainians are trying to repair extensively, and Ukraineâs own production has been largely harnessed for the war industry, so civilian goods are likely sought extensively from the Polish side.
Agreed. There are many companies in Finland that will benefit from Ukraineâs massive reconstruction as the war is likely to end very soon. In addition to Kesko, for example, YIT, which just announced the start of a construction project in the Czech Republic. In that region, there will be a lot of demand for building materials, infrastructure builders, environmental damage repairers, etc.
Looks very good. Older apartments are being bought first, and after their purchase, homebuyers think that it âwould needâ a bit of tuning up, or perhaps even a full renovation is on the cards - a trip to K-Rauta is in order.
I myself am currently renovating an old house, and it has been very quiet at the local K-rauta (hardware store). However, I visit there several times a day at different times. But I do believe that as spring progresses, hardware store sales will increase. In the summer, if as many people as possible start building those outbuildings or outdoor saunas, now that permits are no longer neededâŠ
Kauppalehti visited Finlandâs largest construction site, Keskoâs Onnela in HyvinkÀÀ. The article has a paywall. The new logistics center serves Onninen and K-Auto.
Because Onninen has grown significantly during Keskoâs ownership, it needs more space. Onninen will no longer need five satellite warehouses after the logistics center is completed. Centralized operations streamline Onninenâs goods deliveries.
âWhen 2026 begins, operations and warehouses will have fully moved to Onnela. In winter 2026, K-Autoâs warehousing will also commence,â says Logistics Director Halkosaari.
Kesko is investing approximately 300 million euros in the 85,000 square meter building, and it appears that the budget for the first phase will be comfortably under-run at this rate.
The construction of the logistics center seems to have hit a very opportune time, as construction costs are lower than before, and skilled builders are currently much more readily available.
To top it off, residential construction is starting this year, and will reach full speed already in spring 2026.
Onninen will soon have everything ready; now we just wait for customers.
âIn all business operations, there was one delivery day less due to the previous yearâs leap day. The impact of one delivery day on Keskoâs sales is approximately 2â4 percentage points,â says Keskoâs President and CEO Jorma Rauhala.
I would be concerned about the figures if there had been one more delivery day than a year ago. The grocery trade is stagnant, and technical trade is attributed to seasonal fluctuations.
It still looks bleak. Price investments do not bring growth to the grocery trade, nor do they improve the price image from the consumerâs perspective. Well, several new Citymarkets will open soon, so hopefully they will bring some cheer.
On the RT side, a regrettable observation regarding technical trade: âSales in building and technical trade were EUR 333.4 million in February, decreasing by 0.8%. Comparably, sales decreased by 1.7%. Hardware store sales grew by 4.5% and comparably by 2.8%. In Denmark, Roslev TrĂŠlasthandel A/S has been part of Kesko since 1 February 2025. Sales in technical trade decreased comparably by 5.2%. Comparably, sales for the entire sector decreased by 1.6% in Finland, 8.1% in Sweden, and 0.5% in Norway, and grew by 9.8% in Denmark.â
On the positive side, this: âSales in the car trade sector were EUR 95.3 million in February, growing by 1.7%. In car trade, sales grew comparably by 0.3%. Sales in car trade grew in new cars and decreased in used cars and services. Sports trade sales grew by 1.6%.â
Arttuâs view on the grocery trade is more positive than mine:
Order units are collected almost entirely by automation in grocery automation. Order units are usually collis, whether they are frozen goods, fresh produce, processed goods, dry goods, etc. Only products unsuitable for automation are collected manually.
This method has been used for a decade already in automated warehouses in various European countries and the US.
Automation reliably handles 80-90% of the grocery volume. There are no issues with reliability.
The effects of price investments do not materialize overnight. Changing peopleâs price perception and consumption habits is a slow process, and a couple of months is not enough to draw conclusions about whether they work or not.
The fact that Kesko has entered the price competition is, of course, a risk, but the long-term strategy is clear and credible. I personally believe that Kesko has many competitive advantages and trump cards that will ensure it succeeds in regaining market share in the future.
Although Kesko performs in all weather, the truth is that a boom period is the best time for the company, as values such as quality, sustainability, and responsibility appeal more to consumers when things are going well (the economy is thriving). Finland has now been in a downturn for several years, and this has offered a competitive advantage to discount chains (including S-Group). However, Kesko has performed surprisingly well even in these conditions, even if it doesnât necessarily show in the stock price. The downturn has been utilized, and excellent investments and good decisions have been made that will bear fruit far into the future.
Gradually, the economy is now recovering, peopleâs purchasing power is strengthening, and the values mentioned above are gaining more weight in consumersâ purchasing decisions. If Kesko performs this well during bad times, investors now have a lot of good to look forward to
You are right, itâs not visible overnight. But with an average weekly visitation of 3.4 in the PT trade, the investment becomes visible in 2 months - if itâs going to be visible. This investment was not enough. No problems in construction and cars. In the PT trade, Keskoâs strategy is still too fragmented. Upcoming Citymarkets are a good defensive battle, but not yet enough.
I, on the other hand, think that any potential effects should be visible quite quickly if they are to be seen at all. If that drumming didnât bring more customers to stores in February, it wonât bring them there in March for the same reason. Another observation is that in February, food prices rose by 1.6% compared to the same period last year. Even with that in mind, the performance is very sluggish, even considering last yearâs Shrove Tuesday. The markets seemed to agree, as Keskoâs share price fell by as much as three percent on a strong stock market day, so yesterday I bought a little more Kesko, trusting that with larger store openings, some improvement will be achieved, and that the construction sector will pick up.
On another note, Citymarketâs online store experienced unpleasant data protection issues this week:
For a couple of days now, logging into the entire online store has not been possible. There were similar problems with the Plussa website, but now they seem to be working.
