Kesko has now unveiled plans for its new health & beauty joint venture with Finnish health & beauty and pharmaceuticals distributor/retailer Oriola-KD. The first stores of the new chain called Hehku (meaning Glow in English) are to be launched in January next year. Around 30 stores will then be opened across Finland in the first year, with the target of reaching one hundred stores in total. The preferred locations seem to be shopping centres or inside Kesko’s own hypermarkets.
An online store (hehku.fi) will also be launched in January. Hehku aims to ‘offer a unique selection of products and services that promote wellbeing.’ According to the banner’s Managing Director, Tuomas Mattelmäki, it will employ experts in the fields of health, beauty, nutrition and exercise and offer a professional and personal service. The assortment is to comprise around 10,000 SKUs containing both well-known and up-and-coming brands. In addition to common health & beauty categories, Hehku will also offer nutritional supplements, Kesko revealed in its press release.
Kesko previously disclosed that it plans to later introduce pharmaceuticals to the assortment, if current market legislation is amended.
Kesko has in recent years been busy offloading operations which sit outside of its core business, such as furniture, machinery, agriculture and department stores. Instead, it is now entering a channel with increasing synergies, namely health & beauty. We do not yet know how much of the stores will be given over to personal care items or health food, but we can guess that it will make a significant appearance.
What’s more, being present in the health & beauty segment and linking this to its grocery business will likely have a positive knock-on effect to the grocery brand. Health and wellbeing is one of the most important trends in Finland at present and learnings can be leveraged to make Kesko the Finnish grocer with the best health & beauty offer. The new stores will offer a good solution to backfill vacant space in Kesko’s hypermarkets, which are currently in the process of reducing their non-food assortment. LZ Retailytics forecasts the average sales area of these will decrease from 6,300 to 6,000 sq m 2016-2022.
If the retailer is permitted to later add pharmaceuticals, Hehku will make an even bigger contribution towards making the retailer’s K Citymarket’s coveted shopping destinations.