Swedish discount chains accelerate expansion across Finland

Swedish discount chains are opening several new stores in Finland this autumn as the sector’s market grows faster than the rest of retail, Yle reports.

Rusta plans to open seven new stores in Finland during the autumn. The chain has already opened a department store in Iisalmi in eastern Finland, and will open another in Siilinjärvi later in the autumn.

Jula has also announced plans to open seven new department stores in Finland over the next six months. Biltema plans to open three stores this autumn. In eastern Finland, Jula will open a store in Kuopio, while Biltema will add a second department store in Joensuu.

“The products and prices must be right. In addition, staff who enjoy their work are an important part of the whole,” said Mats Kotka, country manager for Rusta Finland.

The total discount-store market in Finland is now worth more than three billion euros. Consumers are seeking cheaper alternatives without compromising on quality.

Competition for jobs at the stores is also intense. In Iisalmi, Rusta received about 350 applications and hired 16 employees.

Discount-store market continues to grow

The discount-store market is growing faster than the rest of the retail sector. Saara Julkunen, a professor of international sales at the University of Eastern Finland, said she could not give a precise estimate of how much further the market might expand.

“It appears that the entire population is interested in discount stores in one way or another,” Julkunen said.

Not all discount chains are highly profitable, according to Julkunen. However, sales appear to be rising for nearly all of them.

“Some stores want to offer everything to everyone, while others have defined their business concept more narrowly. The perception of low prices must be maintained,” she said.

Julkunen also highlighted the importance of price comparisons. Grocery basket comparisons are conducted regularly in the food retail sector, and she wondered whether product basket comparisons could also be introduced for discount stores in the future.

Location plays a key role

Kyösti Kakkonen, who served as chief executive of the Tokmanni Group for 20 years, said the growth of discount stores benefits consumers.

“It is very good that consumers have more options,” said Kakkonen, who holds the honorary title of kauppaneuvos.

According to Kakkonen, the sale of consumer goods is shifting strongly towards discount stores. He said companies must continue to improve efficiency and logistics to remain competitive, while greater sales volumes create purchasing advantages.

Kakkonen also emphasised the importance of store locations, carefully considered product ranges and a positive atmosphere among staff.

He expects price levels at discount stores to fall as competition intensifies.

“The large discount chains are financially solid, so there will not be a knockout competition. As a consumer, I welcome competition,” Kakkonen said.