The ABCs of the land of the Horseshoe

I was driving around Helsinki the other day, doing my favorite holiday activity, hardware store hopping. The ring roads of Helsinki, like most cities, are lined with car retailers and a chain of familiar brands; IKEA, Biltema, Plantagen, Bauhaus, Gigant, etc., and an occasional Lidl.

Most of the shops are from abroad. Especially the Swedes are very capable of building retail brands with a unique approach, with the capacity to make it in the international market. Besides on-line shopping, I would name the flat boxes of IKEA as the biggest innovation in recent retail history.

When I stopped for a cup of java in the ABC service station, it struck me that I was having my coffee in one of the only such unique products in the Finnish retail. Generally speaking the Finnish retail landscape is depressing. As Saku Tuominen put it, “Swedes made the biggest furniture chain in the world, Finns made the biggest horseshoe“. The way Finns have tried to battle the pressure of low-cost products from the globalized market has been to cut costs, save in design and diminish the quality, which is a losing fight in a country with the most expensive workforce in the world.

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But ABC’s are different. The Finnish consumer market is really centralized, with two massive chains dominating in retail. Fueled by the power of the largest of the two, the S Group, these huge centers packing together supermarkets, restaurants and activity parks (oh yes, almost forgot, you can buy gas too) are spreading along the highways of the country at the speed (and tactics) of Starbucks cafes.

People tend to hate them, because they are all similar and they kill the local business. But they are a unique concept. Besides Rautakirja kiosks (which are also omnipresent in the Finnish towns and villages) it is the only such innovation in Finnish retail. Shouldn’t we love it and be proud of it, instead of loathing?

ABC’s could go international. The duopoly status of the S Group and the other retail giant, Kesko tends to make them slowish for taking risks, especially when you have to be a challenger instead of the dominatrix. But then again, there is nowhere else to grow anymore for these chains, so they are both already active in for example Russia and the Baltic countries. Let’s hope they cross the borders with ABC’s as well – that might also save the business of a few independent gas station owners along the Finnish roads.

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