Finnish retailer Kesko has posted a 0.4% increase in comparable sales in its grocery division the first quarter of 2019, with operating profit at the division rising by 1.6%.
Net sales were down 1.0% across the division, however, with the group's K-Citymarket division seeing a 2.1% decline, K-Market down by 5.1%, and K-Supermarket declining by 0.1%.
Commenting on the performance of its grocery arm, Kesko described it as 'good' considering the later falling of Eaaster this year, with customer numbers 'continuing to grow' across all its chains.
Three new K-Markets were opened in the January to March period, with the group's K-Citymarket Pori Puuvilla being expanded, and remodelling and extensions carried out in some 23 stores.
The group invested around €28.6 million in capital expenditure in its grocery operations in the quarter.
Group-Wide Sales
Across the entire Kesko group, net sales for the January to March period totalled €2.4 billion, a decrease of 0.6% in comparable terms.
Comparable operating profit was also down, to €57.5 million (€63.8 million) in the quarter, with the group citing seasonal profit fluctuations and a decline in car trade sales.
"Kesko’s good performance continued in the first quarter. In the grocery trade division, sales grew, market share strengthened and profitability improved further," commented Kesko chief executive Mikko Helander.
"In the building and technical trade division, sales grew markedly and profit was good considering the fact that due to seasonal fluctuation, operating profit tends to be lower in the first quarter than in other quarters."
Outlook
Looking ahead to the coming year, the group said that 'intense competition' is likely to continue in the Finnish grocery trade, 'although, as purchasing power increases, the importance of quality will be emphasised more than previously'.
The group expects net sales for continuing operations for the next 12 months to exceed the level of the previous 12 months, while operating profit is also expected to be up.
© 2019 European Supermarket Magazine – your source for the latest retail news. Article by Stephen Wynne-Jones. Click subscribe to sign up to ESM: The European Supermarket Magazine.
