TALLINN - Cooperation between ICA Baltic and Kesko Food will allow the two companies to consolidate the hold of up to one-third of the Estonian retail food business and will most likely involve changes in the current branding system of ICA and Kesko Food shops.
ICA, the largest retail trade company in Scandinavia with some 3,000 stores operating in the Baltics under the Rimi trademark, will discuss the merger with Kesko Foods in greater detail once the Estonian Competition Board issues its permit, the daily Aripaev reported Feb. 20.
The two companies will also reportedly consider changing the names of their shops as part of the final merger agreement. The most popular brands such as Rimi in Latvia and Citymarket and Saastumarket in Estonia will likely take over those less popular.
Karmo Kaas-Lutsberg, head of the Estonian branch of Rimi, said the competition between the big names on the Estonian retail market is tough, but there still is room for development.
The new, more jazzy shopping environment concept of Rimi shops will be first realized in the company's hypermarket in the Ulemiste shopping center, Estonia's largest one to open on April 1.
Kaas-Lutsberg also said Rimi would pursue the take-away food segment in its Ulemiste center hypermarket and planned to develop the widest assortment of hot delicatessen and bakery items.
In the next two years Rimi plans to open five supermarkets and two compact hypermarkets in Estonia and will invest a total of 600 million kroons (38 million euros) in Estonia, Latvia and Lithuania.
Rimi currently has five supermarkets in Estonia, 32 in Latvia and 32 in Lithuania, plus four hypermarkets in Latvia and two in Lithuania.
Kesko holds a 20 percent market share in Estonia, while ETK, which operates the Konsum, Maksimarket and A&O shops, controls 22 percent of the local market. A 5 percent share belongs to Selver, and the open markets and minor retailers hold the remainder.
