Online Grocery Markets could challenge Finland’s S & K-group Duopoly

Finlands two major supermarket chains pose a significant threat for the viability of online grocery stores says Pekka Vennamo, former CEO of the Finnish Post.

In recent years, a duopoly has formed in Finland between two major distributors. So far the S & K-group dominance of the food markets has been an nearly unchallenged one, but alternatives, such as the online grocery store, see a chance to get their slice of the pie.

In a press conference organized by network communications company Soprano, Vennamo expressed his concerns on how the activities of the S-chain are creating a situation that is unfavorable for consumers.

“The increase of online grocery stores would create healthy competition in the grocery market,” says Vannimo.

Vannimo’s qualifications for making such comments could be questioned though, the man led the Finnish Post for more than decade, but that hardly makes him an expert on online marketing.

According to Sopranos’ communication assistant Adèle Couavoux, Vannimo, who also happens to be the current chairman of board in Soprano, represents the customer. He has been a long term customer of post sales services and has now switched to online stores, both of which have brought him good experiences, says Couavoux.

The new online store will start its food delivery services next Monday. It promises the delivery fee will be non-existent, as online sales will hold great cost advantages. E-commerce doesn’t require as much commercial space, storage facilities and staff member as traditional stores and markets. Competition will remain difficult though, as the S-chain still holds the upper hand on pricing.

The proliferation of e-commerce for grocery products could bring their high prices down, but for now, Finnish meals will still be accompanied by unfriendly receipts.