Finnish trade sales down in April

Translation: Original comment published in Finnish on 5/31/2024 at 7:35 am EEST.

The target market for Kesko’s daily goods trade, Tokmanni and Lindex (department store and hypermarket chains) decreased by 3.4% in April. Food products decreased by about 3%, but the durable goods market ended up declining by almost 5%. Demand for food products was particularly weakened by the fact that Easter fell in March, unlike in the comparison period. Within durable goods, the decline was split between clothing, down 3%, and home and leisure, down 6%. We estimate that the decline in the durable goods market was influenced by the impact of the political strikes in Finland and the late spring However, after a weak March, the second consecutive month of decline is, in our view, weaker than expected. Kespro's Foodservice market grew by 4%, which is relatively low considering that there were 3 more delivery days than in the comparison period. 

Kesko supported by delivery days in April

Kesko has already reported its sales figures for April, and the market figures do not provide much meaningful information. Kesko's daily goods trade sales were on par with the previous year. Wholesale food sales to retailers fell by 1% and Kespro grew by 5%. As we understand it, the market figures reported by the Finnish Grocery Trade Association (PTY) reflect retail sales, while Kesko's figures reflect front-loaded wholesale sales figures, which are more susceptible to delivery day variations. Kespro's sales grew 5% somewhat faster than the market, indicating that the company continued to gain market share.

Tokmanni's quarter started weakly

The durable goods market is important for Tokmanni, so the 5% decline in April represents a weak trend. Our understanding is that consumption is concentrated in everyday product categories with a lower price point. We estimate that some of the durable goods sales have leaked to hypermarkets as a result of high customer flows and price campaigns. We predict that Tokmanni's revenue in Finland remained roughly at the same level as in the comparison period in Q2, supported by new stores, with comparable growth slightly negative. The April performance is thus weaker than we expected, but with the weather turning summery in May, we think we should see an improvement.

Lindex Group's Stockmann stores supported in Q2 by timing of Crazy Days campaign

The clothing market, which is important for the Lindex Group, declined by 4% in April, while we expect the Stockmann division to grow by 7% in Q2. This is significantly supported by the timing of the Crazy Days campaign more towards Q2 than in the comparison period. However, the market development in April is also a weak number for Lindex in our view.