In the local store, even before Christmas Eve, there was an absurd amount of Christmas merchandise at -50% off, and today some products are as much as -70% off. There was still a lot of stock on the shelves. Either too much inventory was purchased, or sales didn’t go anywhere near as well as hoped. Somehow, over the years, Tokmanni has given the impression that its concept is lost. They try to sell a bit of everything, yet the goods are mostly second-rate.
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Jumbo’s Prisma and Cittari were also selling items at 50-70% off, which is just normal clearance of seasonal products. I went to check specifically for sales today and ended up buying a -60% item from Cittari and a -70% item from Prisma; they were Christmas flowers.
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In Vantaa Porttipuisto today, all Christmas items are 50-70% off. It was quite crowded, by the way. However, the shelves were really empty in some places, and it felt like they were wrapping up the year → most of the seasonal goods had been sold or they want to clear them out now at the latest. Sales have surely been good, but that Q4 rally started from quite far behind, so it’ll be interesting to see how the guidance holds up. Sweden/Dollarstore is a total mystery to me. I would imagine that if a profit warning is coming, it will be this week; perhaps next week is also a possible time for an announcement. I must admit, I’ll be surprised if a profit warning doesn’t come.
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The thing with these is that a large part is likely old stock. Bought for a euro each, sold for €29.90. Now with a -70% discount, the margin is still totally insane in percentages… percentage math is a wonderful thing. Even if you give 70% off when the original margin was 95%, you still keep 80% for yourself 
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Indeed, it’s completely normal clearance activity. Some chains start with lower percentages, while others immediately mark down small quantities by as much as 70 percent. Humans are interesting in that the higher the percentages, the more guaranteed the foot traffic. Along with those, products with healthy margins also get sold.
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Direct import products with insane margins usually end up on those discount shelves quickly. And the larger the quantities ordered, the bigger the margin. I wouldn’t draw any concerning conclusions from that just yet.
Secondly, you practically have to order “way too much” of seasonal products, otherwise you risk running out of stock.
I’m not sure how Tokmanni’s concept is lost. Even the previous quarter was historically brilliant. Dollarstore’s concept, on the other hand, is indeed quite lost; hopefully the implemented reforms yield a positive result. Based on that, there’s reason to expect a step up in Q4, especially considering that the earnings requirements for Q4 were quite ambitious compared to Q1-Q3, and no profit warning has been seen.
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Whatever the margin, it’s better that the goods leave through the front door rather than the back door. Disposing of food is expensive.
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We aren’t talking about food products here. But even for them, it’s better to have too much stock than too little. Within reason, of course. Maintaining perfectly sized inventories is impossible.
Clearance sales also draw customers to stores. Some of them might even buy something other than clearance items.
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I just realized that this judge from the Suomalainen menestysresepti (Finnish Success Recipe) show is the new CEO of Tokmanni.
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And it certainly costs something for a large amount of Christmas seasonal goods to gather dust in Mäntsälä for the next ten months. I think it’s good that something is being done about that amount of inventory.
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This news brings confidence in the recovery of the Finnish economy while boosting domestic demand. This news could have been included in the discussion of every domestic market company. Next year is looking to be a good one. People are waking up from their consumption coma, and all domestic market companies will be grateful.
Joy erupted over Finland’s USA deal: “Jobs and livelihoods for thousands” | Kauppalehti
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Maybe those Christmas trees don’t solve much else besides acting as spawning grounds for perch, like Kreate did last Christmas. On the other hand, I don’t think this constant bashing of a domestic company is a good thing. Shouldn’t we be supporting domestic companies against the likes of Rusta, Clas Ohlson, and others? It’s actually quite unpatriotic to constantly criticize a domestic company. Ponder and think about it—is this domestic company really somehow worse than these foreign ones?
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At least I don’t see anything in the discussion that would give reason to think anyone wishes for Tokmanni to lose to its Swedish competitors. I also lean towards the view that Tokmanni might still disappoint investors with a poor fourth-quarter result, and regarding that, participants in this thread have shared their own observations.
In my opinion, there is no contradiction in expecting a worse result from Tokmanni than what they have guided, while simultaneously hoping the company succeeds both in the domestic market and in Sweden. Furthermore, buying shares of competing companies on the secondary market is not, and in my view should not be considered, an unpatriotic act.
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Sensible reasoning, and that’s good. How the quarter performs is essential. The observations are likely only from the domestic market, and it’s clear that some find these clearance sales significant. However, the most important factors are customer footfall and the total purchase amount, which perhaps fewer people have observed. I don’t claim anything specific, but my observations in Vantaa have been good. But only as observations from Vantaa. I suppose we all hope that the Finnish economy is growing, and that’s what Tokmanni’s growth would indicate?
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This marketplace is definitely worth it.
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Strong pull of SOK’s operational key personnel into Tokmanni’s ranks.
Sampo Päällysaho
Senior Vice President, Grocery 2020-2026
Kim Strönsholm
Vice President, Category Management and Procurement 2020-2025
Vice President, Sourcing and Fresh Food 2016-2020
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Based on those recruitments, one could conclude that there will be more focus on the food side. Edit. And that is indeed how it has been communicated, so it’s consistent action.
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This may be an excellent retail location, but it is an excellent symbolic representation of Tokmanni’s biggest current problem. A couple of times during the spring and summer, I have explained in this thread the critical logic behind retail profitability—especially in the saturation phase. Comparable Growth! •
Simplified, there are 3 ways to grow:
• By far the best growth is in an existing store. No (significant) investment costs, and you get increased sales and economies of scale from 100% of the store’s processes! = even more profitable growth!
• With a new store, without cannibalization (e.g., the first store in a new town). Investment costs are a drawback, but you get increased sales and economies of scale from approx. 25-35% of all retail processes = more sales, and a slight increase in profitability.
• With a new store and cannibalization. Yes, some new sales, but investment costs are a burden. Economies of scale from increased sales on only 25-35% of processes, but due to cannibalization, the sales of one or, at worst, several other stores decrease, and scaling in these units becomes negative. (E.g., sales drop by -10% but central logistics, internal logistics, real estate, property maintenance, energy, electricity, cleaning, store fixtures, and personnel costs remain at the same level). The net effect on economies of scale is negative and, at best, only zero.
There are already 5 other Tokmannis within a 10 km radius of the new Kivistö store! Varisto, Tammisto, Myyrmanni, Kaari, and Konala. The micro-location of the Kivistö Tokmanni dictates that people will also primarily arrive at this store by car. Furthermore, since it is generally known in the general merchandise trade (KT-kauppa) that the average purchase of a car-driving customer is at least 3X, it can be concluded that this 6th store (within a 10 km radius) will with 100% certainty cause cannibalization (among car-driving customers) in nearby stores.
This store opening is a typical example of “Tokmanni disease”: in Finland, growth is only available in places like Ähtäri (6,000 retirees) or Kivistö, which is an area with seemingly excellent purchasing power, but it eats into its own profitability with an investment-heavy Spar concept (Spar-konsepti) that lowers profitability and still has questionable competitiveness.
A reason to avoid until Tokmanni has a working recipe, i.e., 12M rolling comp growth AND increased profitability.
PS. Investments (stores) in the Helsinki metropolitan area are strategically the most risky. When the first Costco, Amazon, Action, or Tedi store comes to Finland, it will cannibalize the Helsinki metropolitan area (PK-seutu) the most. Not all of these will come, but one or some are highly likely to.
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I dare to doubt whether that difference in average purchases applies to discount retail on quite that scale. And another thing is the extent of the differences in customer spending per visit versus, say, per month.
It is also worth noting that in large cities, the share of the car-driving population has been declining for some time. In Vantaa, it is certainly exceptionally high, but still on the decline. For example, between 2019 and 2023, the number of passenger cars per thousand inhabitants in Vantaa fell by 3%. Certainly, the decline is likely concentrated in younger age groups, for whom shopping in brick-and-mortar stores is not as much of a given as it is for the older generations.
It is, of course, true that four Tokmannis in that area would generate higher revenue per store than five Tokmannis.
It seems Ähtäri only has just over 5,000 residents now. Luckily, a couple of thousand summer residents surely bring a nice boost to sales.
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Nominated for Tokmanni’s Board of Directors: Katarina Gabrielson has extensive experience in the retail sector. Throughout her career, she has held several leadership positions, including CEO, business unit director, purchasing and procurement director, and marketing director. Her core competencies include strategic and change management, international business, and consumer business development. Currently, she serves as the CEO of Oriola. Gabrielson is a Swedish citizen.
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