While retailers in many European markets seek to downplay their exposure to the hypermarket channel, in Finland, the format appears to be in rude health, according to the latest sales figures from retailer S Group.
Its Prisma hypermarket chain posted 4.3% sales growth last year, boosted by 'reliable service, good value and a constantly renewing range', the the company said in a statement.
Sales were roughly on a par with the previous year at the group's other banners, Sale and Alepa, while its S-market supermarket operation 'maintained its position as the largest retailer chain in the market', the group said.
S Group's share of the Finnish grocery market increased by 0.5 percentage points last year to 45.9%, the company said, while customer visits to its stores rose by more than 10 million.
S Group is also planning to better utilise its hypermarket network to bolster its nascent e-commerce operation, with sales across the group's online channels growing by 40% last year. Online grocery sales in Finland stood at €48 million last year, with S Group's share of this market valued at around €30 million.
The Prisma banner could also become a more common appearance in neighbouring Russia, too, with S Group announcing last November that it is planning to double its number of hypermarkets and supermarkets around St Petersburg over the next five years.
"It is a huge market with a lot of growth potential,” a company spokesperson told Reuters at the time. “This kind of market business requires a certain critical volume to become profitable.”
Channel Growth
S Group's performance echoes an emerging channel shift in the Finnish market, with smaller, proximity-style stores and hypermarkets are performing strongly, at the expense of standard sized supermarkets.
Data published earlier this month by Päivittäistavarakauppa ry, the Finnish grocery trade association, found that hypermarkets (+3.4%) and large supermarkets (+7.2%) both saw sales gains in January, as did small supermarkets/convenience stores (+10.2%).
Standard sized supermarkets, however, posted a 5.3% decline for the month.
Part of this decline can be attributed to increased taxation measures on alcohol and tobacco, which was implemented in January.
Challengers
Also, while S Group has maintained its position as the leading retail group in Finland - it is 10 percentage points ahead of rival K Group, which holds 35.8% of the market and grew by 1% last year - the sector there appears to gradually becoming a three-horse race.
Discounter Lidl, which first entered Finland in 2002, posted 5.5% growth last year according to Nielsen data, well ahead of the market average. Lidl sits on 9.3% share, comfortably ahead of smaller rivals such as Tokmanni Group (1.6%), Stockmann (0.8%) and others.
The value of grocery sales in the Finnish market increased by 1.0% last year to €17.6 billion, which is the sector's best performance since 2013.
Through continued investment in its hypermarket and online divisions, S Group will be confident of capitalising on this growth.
© 2018 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.
