Issue Jan/Feb 06
Built on co-operation
As one of the 22 regional co-operative societies within the S Group, Arina has served the people of Northern Finland since 1917.
With nearly 1500 retail outlets and in excess of 1.6 million customerowners (members), the S Group represents a major force in Finland and other parts of Northern Europe. The organisation is effectively split into two primary divisions, with one side of the business a collection of 22 cooperative societies across Finland, and the other part made up of the SOK Corporation and its subsidiaries.
Covering a large area in Northern Finland, Arina is one of S Group’s cooperative societies and is responsible for a wide range of supermarkets, hypermarkets, gas stores, gas service stations and restaurants. Through its various outlets and channels, Arina achieved sales in excess of 481 million euros in 2006.
As a co-operative company, its customers own the business and also account for three-quarters of its total sales. In total, Arina currently has over 105,000 owners, which represent roughly 50 per cent of all households in Northern Finland. Customer-owners are its main target group and it is therefore crucial to maintain a good relationship with every one of its customers. Having been the managing director of Arina since 2002 and with the S Group for over 20 years, managing director Veli-Matti Puutio believes that the reason for the company’s existence is to provide services and benefits for its customer-owners.
In all, Arina has a network of over 110 outlets, which are oprated by nearly 1600 members of staff. Grocery and speciality goods stores are responsible for the lion’s
share of the co-operative’s business and in this area it has six primary brands. At the largest end of retail, Arina has six Prisma hypermarkets, which range from 4000 to 14,000 square metres in size and stock between 10,000 and 14,000 grocery items. In the very largest Prisma stores, up to 60,000 items can be on offer, and these huge volumes mean they can offer permanently favourable prices. These hypermarkets boast diverse and extensive ranges including groceries, clothing, home and free-time articles. In all, the S Group operates 47 Prisma stores across Finland with a further six now open in Baltia.
In terms of supermarkets, S Group’s S-Market stores are hugely popular across Finland with a total of over 400 outlets currently in this chain. These stores again offer permanently favourable prices and range in size from 600 to 6000 square metres. The product offering is significantly smaller than that found in Prisma stores with between 5000 and 15,000 items available in S-Markets. Arina currently operates 26 such stores.
Providing convenient corner stores, S Group’s Sale and Alepa outlets, of which there are nearly 300 in total and 31 under Arina’s management, offer complete selfservice, long opening hours and highly competitive prices. These stores are again slightly smaller, ranging from 200 to 600 square metres in size and stocking between 1700 and 4000 items. In addition, in the retail sector Arina also boasts six Pukumies stores, providing designer clothing and six Mick’s outlets selling youth clothing.
Away from retail Arina is also responsible for a chain of ABC full service stations. All of these locations have a café rstaurant, a store, liquid fuel and entertainment services. They usually cover between 500 and 3000 square metres and provide a wide product selection. Arina currently operates five full service stations and 21 unmanned units, with the S Group owning a total of 84 ABC full service locations and over 206 unmanned ABC sites. Across the group, this business unit achieved sales over 1100 million euros in 2006.
Arina is looking to build this business going forward and to this end it has invested approximately 20 million euros per annum for the last three years. This significant investment programme is set to continue for the next two to five years and is intended to help Arina challenge the market leader in Northern Finland, Kesko.
Veli-Matti Puutio feels that Arina will look to achieve this growth organically and through co-operative mergers. New concepts and services will also play a big part in this. For example, in 2003 Arina opened Sokos Hotel Arina, which now has 260 rooms compared to the 60 it had previously. Following this, in 2005 the company opened two new Prisma hypermarkets during the same week. This year, Arina opened a complex of ABC full service station, Finland’s largest S-market and a couple of specialty stores. This all proves that its investment programme is very aggressive, and helped the company achieve 26 per cent growth last year and should enable it to achieve over ten per cent growth annually over the following years.
Another important part of S Group’s portfolio, Sokos Hotels is Finland’s largest and best-known hotel chain. In all, the group has 38 Sokos Hotels in Finland with Arina currently operating two of them in Oulu and Rovaniemi. These hotels are always centrally located in towns and cities, and offer professional services for business guests as well as recreational facilities for leisure travellers. Next year Arina plans to open a new Sokos Hotel in Levi, Lapland.
Concluding, Veli-Matti Puutio highlights four main areas that he feels differentiate Arina from its competitors – the customer ownership, locality, cost effectiveness and customer incentive level (pay back bonus) are all key factors in its ongoing success and will continue to underpin its prosperity.