April 20, 2017 / 1:41 PM / 8 months ago

Finland's Kesko closes more convenience stores

HELSINKI, April 20 (Reuters) - Finland’s second-biggest retailer Kesko said on Thursday it will close another 42 convenience stores as part of its integration of the Suomen Lahikauppa retail chain, after failing to find a buyer.

The Finnish competition watchdog required Kesko to sell 60 of Lahikauppa’s 600 stores as a condition of the retailer’s 60 million euro ($64 million) takeover of loss-making Lahikauppa last year. But Kesko said on Thursday that it had only found a buyer for 10 stores and the watchdog had agreed it could close 42 stores and turn another eight outlets into Kesko stores instead.

“Some of the stores have operated in such small markets, making weak profits or losses, that even our rivals had no interest for them,” Jorma Rauhala, Kesko’s head of grocery sales, said in a statement.

Kesko acquired Lahikauppa to boost market share amid tough price competition and weak economic growth in the Nordic country. The competition watchdog order the store sales, saying a full merger could lead to higher prices.

Separately, Kesko has already closed 51 other Lahikauppa stores.

Finland’s retail sector is highly concentrated. Market leader S Group had a market share of about 47 percent last year.

Kesko’s market share rose to 36 percent on acquiring Lahikauppa, but a full merger would have increased its share to about 39 percent. ($1 = 0.9307 euros) (Reporting by Tuomas Forsell, editing by Jussi Rosendahl and Susan Fenton)

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