November trade boosted by seasonal factors

Translation: Original published in Finnish on 1/2/2025 at 8:40 am EET.

The target market of Kesko, Tokmanni and Lindex’s Stockmann division, i.e., the department store and hypermarket chains, grew by 4.7% year-on-year. At the top end, growth was driven by both the food (4.8%) and durable goods (4.6%) product groups. Within durable goods, the apparel product group remained at the same level as in the comparison period, a slight improvement from the downward trend seen throughout the year. In the home and leisure product groups, revenue grew by up to 6%. The target market for Kesko's food service business declined by 2.5%, negatively affected by one less delivery day than in the comparison period. According to PTY, the Black Week season and the start of the Christmas shopping season had a positive impact on November sales, especially in the durable goods categories, we estimate.

Kesko’s daily goods trade again underperformed the market

Despite a relatively strong development of the market, Kesko's sales in the daily goods trade decreased by 2% in November. Kesko thus continued to lose market share on the consumer side, while the food service business (Kespro), which declined by about 1%, developed faster than the market. For Kesko's consumer business in the daily goods trade, it would be essential to stop the trend of losing market share, which will be possible through investments in price image together with retailers and suppliers from 2025. In addition, the company plans to open several new hypermarket stores over the coming years. However, their potential market-share-enhancing effect will only become visible with a delay towards the end of the strategy period (2028).

Support for Tokmanni from the market for the first time in a while

It has been a challenging year for Tokmanni from a market perspective, as the durable goods market has declined by around 1% during January-November and competition in the industry has intensified. However, for the first time in a while, the durable goods market showed clear growth in November, which we believe also contributed to Tokmanni's performance during the month. We estimate that the sales of the Finnish operations will grow by just over two percent in Q4 on the back of two new stores and comparable growth (~1%). In comparison, the market has developed at a slightly slower pace, but we expect Tokmanni to have gained market share, supported by marketing and discounts, as in Q3.

Market support also for Lindex

The market development was positive for the Lindex Group, with sales in the apparel product group, which is important for the group, increasing after a long period. Our Q4 forecast for the Stockmann division is -2%, so the start of the quarter was slightly weaker than we expected due to a weak October, given the high proportion of fashion in total revenue. December sales are important for Q4, and we believe that success in this area will be crucial. However, Black Week discounts may bring Christmas shopping forward to November, which could dampen December sales. This trend has been particularly evident in recent years in the higher price-point products, which form part of Lindex's offering in the department store business.