KESKO CORPORATION STOCK EXCHANGE RELEASE ... - Euroland

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(The comparable figures have been adjusted to correspond with
the new organisation. In calculating the average number of
employees, part-time employees have been converted to full-time
employees in relation to their working hours.)
The total number of Kesko Group employees has increased
slightly. The number was increased by the expansion of Kesko
Food’s and Rautakesko’s operations in Estonia and those of
Rautakesko in Sweden. On the other hand, the number was
decreased by the outsourcing of service and support activities
in line with strategy. The Group employed 1,156 persons (523)
abroad.
Development of divisions
Kesko Food
Kesko Food´s net sales were EUR 758 million, a decrease of 4.5
percent. Revised pricing and charging practices related to the
chain reform has had an effect of about four percentage points
on Kesko Food´s net sales. The operating loss was EUR 4.2
million, compared with the operating loss of EUR 1.2 million in
the corresponding period of 2000. The main reasons for the
increased loss during the first three months of the year are the
costs of starting up the new chain operations and investments in
the store network. The investments totalled EUR 11.5 million.
Kesko Food Ltd started operating as an independent company on 1
April 2001.
The transfer to a pricing system and payment structure based on
the new chain operating system on 1 January 2001 has
significantly affected the development of Kesko Food´s net
sales. In the first quarter of the year, total grocery sales
increased by about 4-5 percent in Finland. The opening hours of
stores with a floor area of below 400 square metres were
extended at the end of January, which, together with Sunday
openings, stimulated sales. On the other hand, this change
slightly diminished the sales of kiosks, service stations and
large outlets.
The sales of the Estonian units developed better than Kesko
Food´s other units. The operating loss of Citymarket Oy, which
carries on the non-food trade in the Citymarket hypermarkets,
increased from the previous year and was EUR 6.7 million (EUR
5.6 million).
During the first three months of the year, five new K-grocery
stores were opened: a Citymarket in Kuusamo, a K-superstore in