New kid on the block prompts competition

RIGA - The Latvian supermarket sector has a new player. KESKO Food of Finland has just opened its first City Market in the outskirts of Riga and has one more under construction closer to downtown. The company is already boasting it will have grabbed 25 percent of the market within a few years.

Timo Valla, president of KESKO Food Baltic, said at a press conference before the grand opening that it had been a long process and that the company had had its eyes on the area where the City Market stands today since 1999. "This is the beginning of a very ambitious plan for our operations in the Baltics," he said, "We plan to open 15 City Markets in the Baltics."

This first supermarket had a price tag of 3.6 million lats ($5.8 million) and the company is set to invest up to 40 million lats over the coming two years in the Baltics. This would be one of the biggest Finnish investments in the region.

The executive director of KESKO Food, Ari Svensk, said KESKO had studied the market in Latvia seriously and considered the competition as well as customer needs. "In Finland we work differently with different concepts, so we have had to make a lot of adaptations in order to understand what Rigans want," he said. "We want to provide our customers with the widest variety of products."

City Market is the only supermarket in Latvia where more than half of all products are fresh. Previously unavailable varieties of fish and other seafood will be offered, including lobster, crab, oysters, shellfish and shark. To ensure freshness the company will have it flown into Latvia twice a week from fishing areas in Norway and Sweden.

KESKO has also decided to try and break into the wine market with 1,200 different brand names on sale.

Jorma Nivalainen, chain manager of KESKO Food, said stores would offer microwave food products "as soon as the shipments are cleared by customs."

Svensk said more than 100 people would be employed at City Market and that staff had undergone conceptual training so they would make customers feel at home. An 800-place car park lies outside the store. "We want to provide a friendly atmosphere," he said.

Norwegian chain Rimi is currently the market leader in Latvia, with around 23 supermarkets and four more under construction this year. According to Knut Kvisvik, Rimi Baltija director, there are even more Rimis to come next year.

Asked about KESKO's arrival, Kvisvik said competition would help speed up changes in the market. "We want to dominate the market, but we don't want to be the only player," he said.