Downturn in Finnish economy continues to weaken the consumer goods sale – and even S Group’s grocery sale is affected according to today’s half year sum up.
Cost reductions implemented within the S Group resulted in an improved January–June result compared to the previous year. Retail sales contributed close to €5.5 billion, which is the same as for the corresponding period last year.
In January–June 2014, S Group’s retail sales (excluding VAT) totalled €5,468 million. Despite the 1.1 per cent decrease of sales, comparable sales reached last year’s level with just a slight decrease of 0.1 per cent.
The retail sales of the regional cooperative enterprises also decreased by 0.1 per cent compared to January–June 2013 and totalled €5,071 million. The cooperative enterprises’ proportion in S Group’s sales was 92.7% and in SOK Corporation’s sales, 7.3%.
S Group’s supermarket sales increased by 1.2 per cent in January–June 2014. This figure includes the grocery and consumer goods sales of the Prisma, S-Market, Sale, Alepa, Kodin Terra and S-Rauta stores, as well as the grocery and consumer goods sales at other supermarket trade units.
When considered separately, value of S Group’s grocery sales grew by 4.5 per cent, totalling €3,451 million. The consumer goods trade, on the other hand, decreased by 1.4 per cent, totalling €639 million.
S Group states that the current decrease in consumption has also marred the grocery trade. In Finland grocery sales have declined for eight consecutive quarters.
The total number of grocery stores at the end of June 2014 was 940 – five more than at the end of 2013.
Service station store and fuel trade sales decreased slightly by just less than 1% during the first half of the year. S Group’s service station store and fuel sales are managed by the ABC service station chain.
Retail sales in the department stores and speciality stores decreased somewhat, by 0.9 per cent. At the end of June, there were a total of 21 Sokos stores (including the online store) and 35 Emotion stores.
From January–June 2014, S Group’s total profit before extraordinary items and taxes was €122 million, whereas the profit for the corresponding period in 2013 was €61 million, a significant improvement in the result before taxes. In addition to cost reductions, the improved result can be attributed to the merger between S-Bank and LocalTapiola Bank. SOK Corporation’s result from continuous operations before taxes was €35.4 million, compared to €13.8 to the negative in 2013.
S Group’s operational result was €62.4 million, whereas in the corresponding period in 2013 it was €32.2 million. SOK Corporation’s operative result was €1.0 million, compared to €22.1 million to the negative in the previous year.
S Group’s result for the whole year is expected to improve somewhat from last year.
“Consumers’ purchasing power has diminished and will continue to weaken, mainly because of the five-billion euro tax increases implemented during the current government’s term in office. Consequently, the trade sector is hoping for the Government to support employment through the domestic market by easing the tax payers’ burden”, says SOK CEO Taavi Heikkilä.