“These times call for exceptional responsibility. In the difficult and uncertain financial situation, our promises of an affordable shopping basket and a targeted product range are even more important. As a consumer cooperative, our aim is not to maximise our profit, but to make sure that any inevitable price increases are as reasonable as possible for consumers. In July, our Prisma stores won the shopping basket price comparisons in two different media services. At the same time, we are working hard to ensure that the entire Finnish food chain survives these difficult times,” says Hannu Krook, CEO of SOK.
The combined operating result of regional cooperatives and the SOK Corporation (FAS) for January–June 2022 was EUR 66 million, showing an increase of 46%, or EUR 21 million, year-on-year. SOK Corporation’s operating result (IFRS) was EUR 23 million negative, lower than in the previous year. The decrease was mainly attributable to non-recurring write-offs associated with the discontinued operations in Russia. The results of SOK Corporation’s continuing operations improved. S Group’s retail sales before taxes during the first half increased by 9% to more than EUR 6.4 billion.
Significant investments made to improve services continued. During the first half, S Group’s total investments were EUR 253 million. Investments were made in the development of the service network, online sales, digital services, renewable energy and energy efficiency.
Sales in grocery trade outpaced the rest of the market in Finland each month
In supermarket trade, the development of results and sales evened out towards the summer from the coronavirus pandemic peak. As the situation returned to normal, people found their way back to restaurants, other services and speciality trade channels.
The performance of S Group’s grocery trade was strong throughout the first half, and its sales in Finland increased more quickly than the rest of the market every month. According to our estimates, S Group’s market leadership in online grocery shopping strengthened during the first half. The S-kaupat.fi service includes more than 250 S Group grocery stores. Modernisations of brick-and-mortar stores continued. The S-market chain’s modernisation has been completed, and more than half the Sale chain’s stores had already been modernised by the end of June.
Hotels and restaurants experienced a record summer
The first half of the year was polarised for the travel industry and hospitality business. The strict coronavirus restrictions in January and February significantly reduced the operating capabilities of hotels and restaurants. When the restrictions were lifted and various events resumed, sales increased significantly throughout the spring. The excellent pace in sales boosted the travel industry and hospitality business to achieve positive results in Finland in May and June.
The summer season was excellent at S Group’s hotels and restaurants. In July, sales in the business area in Finland even exceeded the level of the 2019 peak year, reaching an all-time sales record.
“The rapid and strong recovery of S Group’s hotels and restaurants has been a particular source of joy. The growth figures are incredible, even though the number of foreign travellers remains far behind the pre-pandemic level. We have worked hard and invested in the development of our services throughout the difficult coronavirus period, and this work is now starting to pay off,” Krook says.
The end of coronavirus restrictions also changed the direction at department stores and in service station store and fuel sales
At department and speciality stores, people’s return to town centres and workplaces brought customers back to brick-and-mortar stores. As more and more festivities and other social occasions were held, sales developed positively in the fashion, beauty and interior design product groups. The Sokos and Emotion chains’ sales increased significantly throughout the spring, and their results also improved.
In service station store and fuel sales, increased travel and livelier group and event tourism increased customer volumes, and restaurant sales at service stations especially picked up. Even though the inflation rate and the rising fuel market prices reduced travel as the spring progressed, the ABC chain was able to improve its sales and results during the first half from the previous year. ABC also increased its market share and productivity in fuel operations.
“Following January and February, our businesses showed very positive development in the spring and summer. There are also concerns about the economic outlook and consumers’ declining purchasing power, for example. Despite these uncertainties, we have cautiously optimistic expectations for the autumn, and we expect S Group’s full-year results in 2022 to improve from the previous year,” Krook says.
Key figures in January–June 2022
Regional cooperatives + S Corporation, January–June 2022:
Retail sales before taxes totalled EUR 6,419 million (EUR 5,889 million in the previous year).
The operating result (FAS) was EUR 66 million (EUR 45 million).
Investments totalled EUR 253 million (EUR 311 million).
The total number of co-op members at the end of June was 2,481,525 (2,449,705).
Bonuses paid totalled EUR 194 million (EUR 182 million).
The number of active employment contracts was 47,870 (43,671) at the end of June.
The total number of outlets at the end of June was 1,949 (1,870).
SOK Corporation (SOK + subsidiaries), January–June 2022:
Net sales (IFRS) stood at EUR 4,034 million (EUR 3,774 million in the previous year).
The operating result (IFRS) was EUR -23 million (EUR -6 million).
Investments totalled EUR 42 million (EUR 18 million).
At the end of June, the number of personnel was 6,773 (6,297).
SOK Corporation’s interim report will be available on 25 August 2022.
