The total operating result (FAS) of S Group’s regional cooperatives, SOK and their subsidiaries in January–June 2024 was EUR 152 million. The retail sales, excluding taxes, of the regional cooperatives, SOK and their subsidiaries increased by 1.1 per cent in January–June, totalling nearly EUR 7 billion.

SOK Corporation’s operating result (IFRS) in January–June was EUR 45 million. The improved performance was supported by S-Bank’s strong development in particular. SOK Corporation’s net sales (IFRS) in the first half of the year amounted to nearly EUR 4.6 billion.

S Group’s investments increased by 26 per cent from the previous year and amounted to EUR 397 million in January–June. They were distributed across Finland and targeted at the development of the service network, energy efficiency, digital services and online shopping, among other aspects. Significant investments include, for example, the online grocery shopping collection centres opened by HOK-Elanto and the Pirkanmaa Cooperative Society, in which automation technology and robots take operational efficiency to a new level.

The Bonus paid to the co-op members in January–June totalled EUR 219 million, which is more than ever before and EUR 6 million more than in the previous year. The highest monthly Bonus ever, more than EUR 50 million, was paid to the co-op members’ bank accounts in January. The nationwide Bonus system is celebrating its 30th anniversary.

“In the first half of the year, we recorded a strong result despite the challenging economic situation. We have succeeded in responding to intense price competition while also investing heavily in the future. The results are reflected in the development of our network and services. The striking growth in online sales is particularly gratifying, as is the good feedback our customers have provided on the reforms,” says Hannu Krook, Chief Executive Officer of SOK.

Both physical and online stores are enjoying great momentum in the supermarket trade

S Group's supermarket trade sales increased by almost 3 per cent in January–June from the previous year, and the operating result remained at the previous year’s level. The challenging economic situation highlighted the importance of price competitiveness and a range of products that appeals to customers. Shoppers continued to favour lower-price options. S Group’s grocery trade continued to focus on an affordable shopping basket, and the price reductions started in 2023 continued in January 2024.

“Our customer numbers continued to grow, which reflects the strength of our supermarket trade. We outperformed the market in Finland in both the grocery trade and Prisma’s consumer goods trade. In addition to an affordable shopping basket, customers were interested in new product categories. For example, we introduced Coop products with excellent price-to-quality and the Luode12 outdoor brand. In June, we started to sell alcoholic beverages produced by fermentation and containing up to 8 per cent alcohol,” says Hannu Krook.

In online grocery shopping, sales increased in January–June 2024 by almost 20 per cent from the previous year, and S Group continued to be the market leader. In consumer goods online shopping at Prisma.fi, sales nearly tripled from the previous year. In addition to online store reforms, the good development is boosted by smoother logistics and new online grocery shopping collection centres. Around a hundred stores already offer grocery deliveries by robots.

Department store and speciality goods sales were boosted by successful campaigns and the strong development of online shopping

In the department store and speciality goods trade, the operating result in January–June was at the previous year’s level, and sales grew slightly from 2023. Sales in S Group’s department store and speciality goods trade outperformed the market. Sales have also started very well in Sokos Vaasa, which KPO Cooperative Society opened in the spring. The development of sales at Sokos and the Emotion chain was boosted by highly successful campaigns. In a tight economic situation, the significance of campaigns has increased. The weakening of purchasing power was reflected in the demand for fashion in particular.

The Sokos.fi online store, which was renewed in 2023, saw particularly strong development. Online sales grew by almost 40 per cent from the previous year, and the customer experience is at the top level. Smooth and inspiring customer experiences are at the core of the development work. For example, ordering and delivery processes have been reformed and relevant functionalities, such as AI-based searching, have been introduced in the service for customers.

Steady development in service station stores and fuel sales – new business launched for corporate customers

The operating result of S Group’s service station stores and fuel sales in January–June 2024 remained at the previous year’s level, despite the tight economic situation and higher costs. Road traffic volumes in the first half of the year were almost at the same level as in 2023, and sales in the ABC chain were quite high. However, because of the decrease in the world market prices of fuels, total sales fell slightly from the previous year.

The national ABC charging network continued to expand in January–June, and charging sales doubled from the previous year. The development was also favourable in ABC service station stores and restaurants. Customers have also been interested in direct sales deliveries of fuels to companies, a new business that started at the beginning of the year.

The travel and hospitality business is in a difficult economic cycle

Sales in S Group’s travel and hospitality business in January–June were at the previous year’s level. However, its performance was weaker than in the previous year. Consumers’ weaker purchasing power and the increase in cost levels caused by high inflation have posed a major challenge to the entire industry.

S Group’s hotels and restaurants were able to meet consumer demand even in a difficult economic situation. Customers were particularly interested in fast-food concepts such as Pizza&Buffa. The demand for hotels was also high, especially outside the Helsinki metropolitan area. However, the duality that started with the pandemic is still clearly visible in the industry. In the Helsinki metropolitan area in particular, development is hampered by the slow recovery of international tourism and increased accommodation capacity.

“We are concerned about an industry that has recently gone through many difficult years. In this situation, increases in the general VAT rate and the accommodation VAT rate are hitting the industry hard. In addition, the cut in state aid for Visit Finland is a setback for the international marketing of Finnish tourism. Tourism has great growth potential, and this would be the time to invest in the country brand,” Krook emphasises.

Stable outlook for the rest of the year

During the current year, the operating environment has stabilised in many respects for S Group’s business operations, and there are initial signs of a turnaround in the economy. However, uncertainties concerning economic development and the global political situation are holding back the recovery of consumer confidence and purchasing power.

“Despite the challenges, our outlook for the rest of the year is quite stable. We expect the full-year operating result of the cooperatives to be at a good level, and SOK Corporation’s operating result is expected to rise to the previous year’s level or even improve slightly,” says Hannu Krook.

Key figures in January–June 2024

Regional cooperatives, SOK and their subsidiaries January–June 2024:

• Retail sales before taxes totalled EUR 6,961 million (EUR 6,888 million in the previous year).

• The operating result (FAS) was EUR 152 million (EUR 149 million).

• Investments totalled EUR 397 million (EUR 315 million).

• The total number of co-op members at the end of June was 2,603,016 (2,531,756).

• Bonuses paid totalled EUR 219 million (EUR 213 million).

• The number of active employment contracts was 48,457 (48,128) at the end of June. (The figure includes S-Bank.)

• The total number of outlets at the end of June was 2,015 (2,008).

SOK Corporation (SOK + subsidiaries), January–June 2024:

• Net sales (IFRS) stood at EUR 4,562 million (EUR 4,428 million in the previous year).

• The operating result (IFRS) was EUR 45 million (EUR 38 million).

• Investments totalled EUR 20 million (EUR 30 million).

• At the end of June, the number of personnel was 6,466 (6,256).

SOK Corporation’s interim report will be available at S-ryhmä.fi on 27 August 2024.