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2016-01-18

Kesko Oyj: K-food stores will reduce the prices of 2,000 products in January and February

KESKO PRESS RELEASE 18.01.2016 AT 14.00

K-food stores will reduce the prices of 2,000 products due to a fall in raw
material prices on the world market and a decrease in costs. In the current
economic situation, the price of food has become increasingly important to
many consumers. At the same time, the role of food quality and local origin
in making buying decisions is growing. Last year, the sales of products from
local producers at K-stores increased by 15 per cent.

"A continuous fall in consumer prices as long as this is highly exceptional.
The last time was 50 years ago. As a result of it and a decrease in costs,
K-food stores will reduce the prices of around 2,000 products. The adjustment
of prices to market conditions is a perfectly normal operation in the grocery
trade," saysJorma Rauhala
, Senior Vice President for Kesko's grocery trade.

The purchase prices of grocery products change regularly, because raw material
prices are affected by availability, the success of the crop, and the
exchange rate changes of different countries. Raw materials are purchased in
large quantities under long-term contracts, which is why there are delays in
the pass-through of changes of world market prices to consumer prices. The
Russian export ban has also markedly reduced the exports of Finnish foods,
which, in turn, reduces consumer prices in Finland. In addition, Kesko has
continued the enhancement of its own functions.

"We ought to remember that price is not the only deciding factor of a food
store - food is a far too valuable issue to be discussed only in that
respect. K-food stores are the quality leaders in the Finnish grocery trade.
We provide Finnish consumers with the best food stores, at which excellent
service, the most diversified selections and a comprehensive selection of
local Finnish products meet. The sales of products from local producers at
K-stores, for example, have grown on several consecutive years and last year,
their sales increased by 15 per cent," says Rauhala.

A competitive price level is a precondition for success in the Finnish grocery
market. But in its role as the most responsible food retailer in the world,
the K-Group's duty is to take care of wellbeing throughout the food chain.
Kesko and K-food retailers are continuously taking concrete actions in order
to safeguard the vitality of Finnish food production. Examples of this
include the launch of the "Thank the Producer" operating model, active
participation in the Blue and White Footprint campaign and the Local Food
Date events (Lähiruokatreffit) bringing together local producers, stores and
consumers. Last year, K-retailers' purchases of products from local suppliers
were €570 million. The reduction of prices must not have a negative impact on
the quality of Finnish food, or the vitality of primary production and the
food manufacturing industry.

Price reductions will be implemented in one store chain at a time in
January-February as follows: around 2,000 products at K-citymarkets, around
1,350 at K-supermarkets and around 550 products at K-markets. The first price
reductions took effect at the beginning of January and the next reductions
will be made in February.

Further information:

Senior Vice President Jorma Rauhala, Kesko, grocery trade, tel. +358 105 322
211
Vice President Ari Akseli, Kesko, grocery trade, tel. +358 10 532 3490
Vice President Karoliina Partanen, Kesko, grocery trade, communications, tel.
+358 105 320 744

K-food retailers, with whom the Kesko grocery trade applies the chain business
model, are responsible for customer satisfaction at more than 900 K-food
stores. K-food store chains are K-citymarket, K-supermarket and K-market.
K-food stores are the most responsible in the world in their sector. Their
strengths also include superior fresh food departments, competent service,
the widest selections, Finnish products and Pirkka. K-food stores provide
both high quality and affordable prices.

K - for shopping to be fun.

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This announcement is distributed by NASDAQ OMX Corporate Solutions on behalf of NASDAQ OMX Corporate Solutions clients.
The issuer of this announcement warrants that they are solely responsible for the content, accuracy and originality of the information contained therein.
Source: Kesko Oyj via Globenewswire

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