Finnish Grocery Trade 2005
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taitto_engl2005 24.8.2005 11:05 Sivu 1 Daily consumer goods trade 2005–2006 taitto_engl2005 24.8.2005 11:05 Sivu 2 2 D AILY CONSUMER GOODS TRADE 2005–2006 given to the objectives of FFMA, since the volumes of the BIG PLAYERS SHOULD companies it represents are clearly bigger than those of any HAVE A LOUDER VOICE other field in the trade industry. One would expect the ”euro per vote” principle to have an impact in the broader The European Union’s expansion to the Baltic states in 2004 organisational context: the opinions of a big player should be affected the operating conditions of daily consumer goods heard more loudly in statements concerning the trade industry. trade to such an extent that trade representatives in Finland proposed to the Government measures to secure competitive Discussion about the competitiveness of the Finnish daily conditions for the Finnish foodstuffs chain. In autumn 2005 consumer goods trade often involves the question of food the Government will provide Parliament with a report on prices. To ensure its competitiveness, trade has shown the impact that opening hours and other restrictions, as well initiative and emphasised lighter cost structures. For example, as indirect taxes, have on trade. The report is based on our efficiency per working hour and inventory turnaround material produced by the working group appointed by the closely correspond to other European countries. We cooperate Ministry of Trade and Industry; the working group included with food industry and focus on the management of long representatives of trade and the main Ministries. production chains in our search for more cost-effective ways to get food from the field to consumers. The Finnish Food Marketing Association (FFMA) is pleased to note that issues related to the industry are finally The price level is not an issue that concerns just trade but being handled at this level and that the industry is treated on Finnish society on the whole. The price level in a country par with others. The trade industry has finally received the with a high standard of living is influenced by the status that it deserves because of its significance to the workforce, production and other background costs in both national economy. Nevertheless, the results of the Ministry- production and trade. Owing to regulation, certain elements appointed working group merit a few critical comments. of the trade processes feed inefficiency and affect consumer prices. Real-estate expenses, for example, have plenty of Trade is not a homogeneous industry. Just like traditional room for streamlining but current legislation prevents it. industry, which encompasses fields from wood processing to electronics, trade covers a wide range of players. The Daily consumer goods trade expects state authorities to operating conditions of wood processing and electronics – adopt measures to improve its operating conditions. By and sub-fields within them – must be approached from deregulating opening hours and easing other trade different angles. Similarly, trade encompasses daily restrictions, as well as making decisions on indirect consumer goods, speciality shops in various fields, big chain taxation, Parliament and the Government will play a crucial businesses, as well as small entrepreneur-led companies, all part in determining the possibilities for Finnish trade and of which have different needs and opinions. the Finnish food industry to continue to operate in Finland, as The final report submitted by the Ministry’s working group well as in defining their role in the appears to be a compromise created for a seemingly uniform international division of work. entity; after all, trade was heard as an industry only once it had reached an internal consensus. One can only wonder These decisions will also what would have happened to Finland’s competitiveness had determine how trade can meet the the same been required of traditional industry. needs of Finnish consumers. If the situation were assessed, for example, in terms of the Antti Remes, Chairman employment goals set for trade, more emphasis should be F INNISH F OOD M ARKETING A SSOCIATION CONTENTS Big Players Should Have a Louder Voice 2 Purchase and Logistics of Daily Consumer Goods 19 Daily Consumer Goods Trade and Daily Consumer Goods 3 More Efficient Logistics 19 Finnish Market for Daily Consumer Goods 3 HoReCa Wholesale 20 Daily Consumer Goods Trade and Society 4 Growth from Meal Sales 20 Industrial Policy Secures Services in Participation in International Purchasing Organisations 21 Daily Consumer Goods Trade 5 Private Labels 21 Store Categories and Definitions 6 Development in Product Group Sales 22 Key Figures 2004 8 FFMA Organisation 23 Of Interest to Consumers 9 FFMA’s Members 24 Sales and Change in the Value and Volumes of Daily Consumer Goods Shops 1981–2004 9 Text: Finnish Food Marketing Association and the Number of Shops by Shop Type and Alliance in 2004 10 Kehittyvä Kauppa (”Developing Trade”) magazine. Number and Sales of Daily Consumer Goods Shops in Rural Areas 2002–2004 10 Photographs from the image banks of FFMA members. Sales of Daily Consumer Goods by Shop Type 1997–2004 10 Sales of Daily Consumer Goods by Chain in 2004 11 Paging: Bit & Page Oy, Tampere. Alliances in Daily Consumer Goods Trade 12 Kiosk Sales 16 Printing house: Painotalo RePe, Helsinki 2005. Department Store Sales 17 Important Projects for the Benefit of Trade 18 ISSN 1456-3061 taitto_engl2005 24.8.2005 11:05 Sivu 3 D AILY CONSUMER GOODS TRADE 2005–2006 3 DAILY CONSUMER GOODS TRADE AND DAILY CONSUMER GOODS In the Nordic countries daily consumer goods refer FINNISH MARKET FOR DAILY to foodstuffs as well as to products that consumers CONSUMER GOODS use on a daily basis and normally purchase with food. In other words, daily consumer goods include food, beverages, tobacco products, techno-chemical In Finland the market for daily consumer goods has products, household papers, newspapers and maga- traditionally been described in terms of retail sales. zines, and cosmetics. However, supermarket sales are only one part of an extensive, constantly changing field engaged in in- Daily consumer goods trade usually refers to su- ternal competition. permarkets that mainly operate on the self-service principle and offer a full range of daily consumer In addition to full-range supermarkets, daily con- goods. Foodstuffs account for some 80 % of the sumer goods retail encompasses speciality food overall sales of daily consumer goods stores. shops, kiosks, service stations, discount stores and marketplaces. The market also includes the daily A further distinction is made in Sweden, where daily food service of HoReCa wholesale customers, such consumer goods trade is contrasted with ”less as public institutions, and sales to other customers, frequently purchased goods”, including clothing, such as restaurants, cafeterias and employee restau- furniture, electronics and sports items. Compared to rants in the private sector. EU statistics also consider the concepts of ”utility goods” or ”speciality goods”, the alcohol retail sales of Alko Inc. to be part of the the notion of ”consumer goods” more accurately daily consumer goods market. describes the significance that the availability of shops offering these items has to the consumer. The Using this calculation method, the value of Finland’s differences in meaning should be kept in mind when daily consumer goods trade in 2004 amounted to discussing trade regulation, for example, opening more than 20 billion euros. hours and construction. Daily consumer goods markets in 2004 according to EU principles EUR 20.5 billion (incl. alcohol), growth -0,2 % Public services Restaurants + Alcohol in rest. Daily cons. goods Alko (6 %) (5 %) cafes (19 %) (3 %) Other (10 %) stores (57 %) EUR 1.2 EUR 1.1 billion EUR 3.9 billion EUR 0.6 billion EUR 2.1 billion EUR 11.6 billion billion Rest. (incl. beer) Kiosks Basic Scan Track Chain sales of daily EUR 1.9 billion EUR 0.5 billion group consumer goods EUR 10.6 billion EUR 11.0 billion Cafes Service stations Other daily consumer Other daily cons. EUR 1.1 billion EUR 0.3 billion goods retail sales goods trade EUR 0.7 billion EUR 0.6 billion Fast-food rest. Discount stores Specialty shops EUR 0.4 billion EUR 0.2 billion Covered marketplaces Mobile shops Employee Closed down restaurants Marketplace sales EUR 0.3 billion EUR 0.5 billion Grill and snack kiosks Other daily cons. goods retail sales Ca. EUR 1.1 billion Source: A.C. Nielsen Finland Oy taitto_engl2005 24.8.2005 11:05 Sivu 4 4 D AILY CONSUMER GOODS TRADE 2005–2006 DAILY CONSUMER GOODS TRADE AND SOCIETY Trade as a producer of basic services Big fluctuations in the need for workforce have Finland has a versatile store network that serves increased the number of working hours of part-time customers in different life situations and takes employees, in particular. responsibility for national food service. Migration, as well as changes in the population’s age structure and In 2004, part-timers accounted for 50 % of the consumption habits, pose big challenges to trade. employees in daily consumer goods trade and 60 % Chain stores keep developing their services in cities of the employees in department stores. Overall, part- and other urban areas, as well as in rural areas. timers made up 40 % of the employees in retail trade. Nearly half of the part-time employees work 30–34 hours a week. Trade as an employer (Source: Finnish Trade/FFMA) Trade employed an average of 248,600 people in 2004, over 7,000 more than the previous year. Retail trade had an average of 127,400 employees, while Development of trade-related training wholesale accounted for an average of 82,600. The With consumers’ respect for service increasing, trade remaining 38,600 wage earners were employed in is in a good position to offer service-minded youth vehicle and gasoline sales, among others.