Translation: Original published in Finnish on 10/31/2024 at 7:00 am EET.

The target market of Kesko, Tokmanni and Lindex’s Stockmann, i.e., the department store and hypermarket chains, saw revenue fall by one per cent in September. The development was negative for both food products (-0.3%) and durable goods market (-2.2%). Within durable goods, the decline was driven by sales of apparel (-5.4%) and home and leisure (-1%), both of which have been in decline for some time. The target market for Kesko's food service business (Kespro) also decreased by 0.9% from the comparison period. The number of delivery days was at the level of the comparison period, and PTY commented that the increase in the VAT rate had a negative impact on sales development. However, it is noteworthy that the VAT rate for food products did not increase.

Kesko's daily goods trade gained market shares

Based on Kesko’s already reported sales figures, the company’s daily goods trade gained market shares during September. Consumer sales remained at the level of the comparison period, while Kespro grew by almost 3%. As expected, sales of durable goods decreased from the comparison period. The gap to the market was particularly pronounced for Kespro. Although the time for systematic price investments will not come until 2025, we estimate that Kesko's price promotions have been one of the factors behind the faster than market development in consumer sales in September.

Market environment continued to be challenging for Tokmanni in Q3

The market continued to develop in the wrong direction for Tokmanni. Sales of apparel and home and leisure goods, which are important for Tokmanni and account for around half of the company's sales, have been systematically declining throughout Q3. Although the market performance has been slightly weaker than our forecasts for Tokmanni's Finnish operations (Q3 revenue growth of 1% and comparable store revenue growth of 0%), the company's reported focus on price image could confuse the dynamics between Tokmanni and the market performance in the short term (i.e. Tokmanni would gain market share). Tokmanni will report its Q3 results on November 15.

Lindex department stores' Q3 revenue fell along with the market

The apparel market, which is important for the Lindex Group, also declined sharply in September (-5%) and in Q3 as a whole in the same range. Lindex reported its Q3 results already last week. The revenue of Stockmann department stores in Finland fell 4% in Q3, and the company commented that this was due to a decline in the fashion category in line with the market, while other categories performed slightly better. At group level (i.e. both Lindex and Stockmann chains), Lindex’s sales in Finland decreased by 3% in Q3.