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K+S Urbanism – Will Mega-Retailers Kesko and S Group Ever Think Outside the Box?

Last year my neighborhood in Helsinki experienced a small, but curious change. A stuffy Czech-themed beerhouse called Milenka got refurbished into a somewhat trendy Scandinavian-style one, Ølhus Oslo. Now, the incident that a worn-out joint got replaced by something more hip is not exceptional at all – new eateries and bars get opened all the time in my neighborhood which these days continuously shows up on all sorts of “hipster” lists.

But what caught my attention is that the bar belongs to a national mega-retailer and restaurateur that goes by the name S Group. The Ølhus family is their new chain of bars targeted for the young and trend-conscious urban dweller, a consumer group who apparently were not likely to set foot into the Czech-themed bar.

Olhus Oslo.
Ølhus Oslo in Kallio, Helsinki.

I find this interesting because the bar’s evolution introduced a more consciously and distinctly urban-oriented chain concept than ever before in the S Group’s portfolio of services. The dynamism behind the Ølhus makeover paints a picture of much broader contemporary changes in the consumer market that cities around Finland are dealing with. The big question is how to respond to them adequately.

Let me explain why.

Finland’s seven largest urban centers and especially Helsinki, Tampere and Turku are projected to grow by altogether one million new residents by 2050 due to natural population growth, immigration and an intensifying urbanization process. An increasingly larger proportion of these future citizens also culturally value a richer urban experience than before. To ensure happiness and sustainability for everyone, it really matters how we design our cities today.

From the days when I started writing about contemporary urban issues in Finland, I’m sensing that a dawning paradigm shift is underway within the public urban planning spheres. And what’s delightful is that these new ideas are not solely present in the large urban centers but they’re flowing into smaller cities, too.

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Early this year I had the pleasure to meet Seinäjoki’s City Architect Jussi Aittoniemi and listen to him present local planning projects. His team’s enthusiasm for making Seinäjoki more livable by adding density and people-oriented infrastructure into the center really surprised me. “Younger people appreciate urban living and we need to adapt to that”, Aittoniemi mentioned as one of the core reasons behind the city’s new strategy.

Fantastic. Just a couple of years ago talk like this seemed like a distant utopia. However, although urbanist values are in relatively good currency within the planning sphere, it’s important to understand that planners aren’t the only stakeholders with power to influence the grand urban project. The value systems that particularly business owners carry  have a tremendous impact on what kind of places we live in.

With this blog, I’ve so far explored whether quality urbanism is a topic of any interest with the housing developers, office building developers, or mall developers. Unfortunately it doesn’t so far seem that it would.

This brings us back to Ølhus Oslo and its owner. What about retailers? Obviously, it’s not just planners who make choices about the kind of shopping destinations and retail infrastructures get built in cities. It’s the retailers themselves who are throwing in the money and have their own ideas how its best spent.

An interesting example in this context comes from across the Atlantic. Contrary to all expectations, the king of all out-of-town megastores, Walmart, introduced an urban strategy and evolved to fit into urban areas by rolling out new smaller-footprint concept stores. These are catered for a new generation of shoppers whose spending power is clustering now elsewhere than in Walmart’s home terrain – suburbia.

Urban Walmart. Image courtesy of UrbanTurf.
Not bad, Walmart. An example of a mixed-use urban Walmart project in Washington, DC. Image courtesy of UrbanTurf.

You may think what you like about Walmart as a shopping destination, but the point I want to emphasize is that Walmart has actively “anchored” itself into projects that support the principles of creating good quality mixed-use urban commercial centers. And simultaneously they’ve given their store concept a makeover from something completely incompatible with an urban neighborhood into a version that does.

Another Walmart. Image courtesy of JBG,
A rendering of another urbanized Walmart. Don’t pay attention to the store, but everything wrapped around it. Image courtesy of JBG,

While the urbanizing Walmart is a good example of consumer-led “Ølhus moves” within the US retail scene, in Finland it more exceptionally than in many other countries first matters what kind of culture the retailers themselves value. Ølhus Oslo’s owner is not just any old barkeeper, but the other pair of a corporate duo whose power cannot be overlooked in Finnish urban development.

Kesko and S Group – Two Local Giants

The corporations Kesko and S Group – or the K and S groups as we typically call them – dominate the grocery retail market with a joint share of about 80%. Both have extensive operations with other consumer goods, and the S Group has also very thoroughly expanded to the hospitality industry providing service station, restaurant and hotel services. Like my new Ølhus.

A reality in Finland is that whenever making schemes for new neighborhoods, all cities, towns and villages will necessarily need to deal with the K and/or S groups when it comes to programming services. The companies have a combined revenue of over 20 billion Euros, which gives certain privileges in helping cities and towns sketch exactly where and what kind of supermarkets and other stores they’ll be receiving.

Avoiding using K and S services is literally a tough job. Not because they’re exceptionally charming, but because for instance buying groceries is obviously a necessity. Even here in Helsinki where you’d imagine having an abundance of choices, I live near four supermarkets and two of them are S and one K. The fourth one is the duo’s only foreign competitor Lidl, which bravely tries to combat the local Goliaths.

The cultural dimension of this phenomenon is a bit like as if we’re living in a nation-wide dystopian example of cultural globalization. Someplace where you can only get by with swiping your K-Plussa or S-Etukortti loyalty card in chain after chain, and dream of personalized levels of service and a meaningful consumer experience. If you’ve ever spent time in Finland, you’ll know what I mean.

Globalization. Image source: Velotide.
In an old great Simpson’s episode Bart discovers that Starbucks has opened shop at the local mall in a similar fashion K and S outlets are distributed across Finland. Image source: Velotide.

From an urban planning and design angle, much of the K and S groups’ revenue growth during the past two decades has come from embracing car culture and suburban building designs. This has brought us inhuman and sprawl-inducing exurban or suburban hypermarkets, big-box superstores, gigantic service stations, and so forth.

K-urbanism in Klaukkala. Image courtesy of Rovakate.
K-urbanism in Klaukkala. Lovely. Image courtesy of Rovakate.

Although compared to  e.g. Walmart before their urban strategy, the K and S groups’ outlets are already everywhere from city cores to the exurbs. In the existing downtown areas new shops are placed for example in underground facilities at the basements and street levels of already existing buildings or tugged inside new shopping centers.

But nonetheless, as cities are growing through new neighborhoods or infill development, also the K and S are joining in on the party. And it’s not insignificant how.

Prisma Imatra. Image courtesy of Ark'idea.
The rendering of a new Prisma on its way to ruin Imatra. Image courtesy of Ark’idea.
K&S Urbanism

Since Helsinki is as urban as it gets in Finland, it’s the prime location to get some insight how the K and S are anchoring themselves into a rapidly urbanizing world. For starters, let’s ask which way the wind is blowing.

S Group’s Helsinki Cooperative Society Elanto (HOK-Elanto) Director of Real Estate Jyrki Karjalainen and Kesko Shopping Centre Operations Manager Mika Ohenoja, how do you see the future of K&S retail operations?

JK: “The Helsinki region is growing fast and we are active with ensuring retail services for the growing population. We’re especially seeking to invest in the new brownfield neighborhoods of the expanding inner city (Jätkäsaari, Kalasatama) and around rail transit nodes where a lot of future urban development will occur.”

MO: “People are indeed concentrating into cities and that obviously has an impact on us retailers. We want to be where people are.”

Alright. That sounds promising. Let’s then see how it looks and take a peek at the urban design of their new supermarket-class shopping infrastructure to examine the nature of this burgeoning inwards-directed investment spree.

The inner suburbs Haaga and Maunula are relatively sought-after places to live, especially among those who can’t afford an apartment in the highly competitive housing market of the inner city. Neighborhoods where the “urban” is slowly spilling over to the “suburban” as the city grows. Both have recently experienced infill housing development and the arrival of a new supermarket, Haaga from Kesko (2013) and Maunula from the S Group (2014).

The instant feeling I get from these new projects is that they’re plagued with the same phenomenon as most construction projects around intensifying Finnish cities. It’s as if developers from different business branches are trying to squeeze concepts originally architecturally designed for suburbia to fit into less space. The excess baggage is a complete lack of respect towards shaping public space, featuring a lot of blank walls and ugly architecture.

However, compared to the vast selection of all supermarkets across Finland, these two cases actually portray what K and S retail development is at their best. The S-market in Maunula is in fact, at least to my experience, highly progressive. This is the first and only example where I’ve seen a new supermarket concept retail building that has greet-the-street retail connected to it. Although the other three sides of the building suggest that the design is mostly thanks to the city’s requirements than the S Group embracing better urbanism.

I suppose the verdict with these two is ‘could be worse’. What about the flagship stores in the retailers’ car-culture end then?

K-Citymarket Iisalmi. Photo courtesy of Kesko.
K-Citymarket Iisalmi. There’s not much else to say. Photo courtesy of Kesko.

Kesko’s superstore brand is called K-Citymarket and S Group’s counterpart Prisma. The largest of these monster stores size up to almost 20 000 square meters. More often than not, you’ll find them near highway intersections and surrounded by a sea of parking.

Within Helsinki’s city limits, the stand-alone superstores have however slightly evolved from the basic format due to space issues. The Prisma stores in Viikki (2007) and Itäkeskus (2009) have emerged in somewhat intensely built-up areas ca. 10km from the city center and have been designed to fit into smaller lots than the average suburban hypermarket. The succeeding innovation in format evolution has been to build two stories instead of one – groceries on the bottom and other stuff upstairs. And the regular surface parking lot has been replaced by a garage.

Both superstores are marketed to have excellent accessibility with both public transportation and cars. This may be true in national hypermarket comparison, but only arriving by driving is in fact convenient for most people. This aspect is best reflected by the dull and sometimes horrific pedestrian environments around the buildings.

Terrible. But yeah, these superstores were built ages ago. Anything new on the box front?

Unfortunately, yes. The superstore concept for both corporations was originally just a huge out-of-town grocery store just like any old Walmart, Tesco superstore or what have you. Little by little, the concept has since evolved by inserting a bunch of additional retail space inside the K-Citymarket and Prisma premises, especially for other chains the corporations have created. In other words, the superstores began to slowly “mallify” around the turn of the century and have since strongly been on that path.

Mallificiation in Viikki.
A glimpse of how the mallification started. Just add a few specialty goods next to the check-outs and before you know it, all services of the area are under one roof. The highway photo on the wall is decor from a driving school, if you were wondering. The photo is from inside Prisma Viikki.

The most recent example and current state of this phenomenon is found in Helsinki’s Kannelmäki. Less than two years ago the local suburban hypermarket Prisma grew into a full S-Group-owned indoor shopping mall, Kaari, equipped with about 80 additional stores.

From Prisma to indoor mall.
A view from inside Kannelmäki’s Prisma-to-mall evolution.

And Kesko has proved it knows how to play this game, too. They’ve recently opened new malls in at least the cities of Lahti (2011) and Kouvola (2012). In January, they unveiled a project to splurge hundreds of millions into transforming the site around their old K-Citymarket superstore in Helsinki’s Itäkeskus into a massive shopping mall by 2017. Believe it or not, this is right next door to an even larger shopping mall.

Itäkeskus. Image courtesy of Kesko.
Kesko’s Itäkeskus mall-to-be is the one on the left. Image courtesy of Kesko.

According to Kesko’s Mika Ohenoja, the project “is the outcome from a decade’s worth of development work. Once finished, the mall will create an attractive and easy destination for everyday services and leisure activities. Furthermore, Helsinki Metropolia University of Applied Sciences is developing a large new campus close by and our project will fit that scene perfectly.”

Hmm. If the new students have a mindset in any way similar to mine, I’m not so sure about a perfect match. I’m no retail expert, but the design trends I’m seeing in the K and S retail world are not exactly contributing to the creation of lively and connected shopping districts or urban streets. Since we know the business environment is changing and people also give more value to the pleasantness of their environs, my nose says that a logical move for the K and S groups (or at least one of them) would be to do what Jussi Aittoniemi’s Seinäjoki has done and start adapting their policies towards retail formats and urban design approaches that fit a new culture of living.

But who knows, since the Itäkeskus project took a decade to evolve, maybe there are still-unveiled plans underway for introducing projects uniquely designed for people who also want to consume quality urbanism while shopping. Let’s ask.

Jyrki Karjalainen, I’m concerned about S Group’s mallification trend. What kind of investments are you planning on doing next? Still more indoor malls and superstores?

“At the time we built Kaari [the mall in Kannelmäki], our investments for the Helsinki region were around 100 million Euros per year. Today, the rate has come down to around 40 million. This is because we are focusing on smaller store concepts (Alepa’s & S-Markets) and smaller Prisma hypermarkets. The Prisma in Kannelmäki will likely remain as Finland’s largest hypermarket, we’re downscaling now. Overall, I believe that after the currently developed or planned large shopping malls in the region [Kalasatama, Pasila, Lommila, Kivistö…] we’ve reached a saturation point in Helsinki, and will see less new ones afterwards.”

I’m glad to hear that. Sounds like sometime in the future – if a very distant one with all those malls still unbuilt – Helsinki could see the emergence of a brand new shopping street. That would be something!

It’s a bit as if the S Group is having an urban adaptation trend of some sorts going on. Is that so, Jyrki Karjalainen? Will S Group be actively involved in introducing mixed-use developments?

“The city plans regulating urban development are generally leaning towards more density and urban living, and we also need to comply with them and smaller lots. In the future we’ll be seeing more shopping centers that combine retail and apartments. Good examples to this end are the plans to redevelop the old shopping centers in Lauttasaari and Kannelmäki. We will be actively engaged in these types of projects.”

Great! But not so fast. What about my shopping streets and public space? Does your corporate sustainability program have any dimension focusing on the public realm and urban design? Are you also going to introduce principles promoting walkability etc.?

“…”

Looks like another blow for the future of quality urbanism. But I can’t really say I’m surprised. So far also those urban planners and designers who have discovered the wish to adapt to the needs of urban living are still very much figuring out how to transform their enthusiasm into something real.

The current state of K&S urbanism underlines that planners are also the ones who are going to need to bear the torch in going forward with the “Ølhus move” of the city-building business – and demand it from others, too.

Here in my neighborhood I can luckily vote with my feet and choose where I drink my beer, but a lot of people are stuck with just Milenka as the only option whether they want that or not.

Six Major Developments Shaping Finnish Cities: 2014 in Review

Another exciting year has passed! To wrap up 2014, I decided to piece together what I think are the six most important developments that shaped Finnish cities during the past year.

Most things obviously weren’t invented this year nor did they directly affect every city; it’s better to grasp my list as themes that peaked to dominate urban policy discussions or to guide planning practice. Nonetheless, I feel that exceptionally much has happened on the Finnish urban development front and I believe the items on my list are likely to profoundly shape our cities and activities in them in the years ahead. Some of them I’ve already blogged about, some I’m looking back on now.

Here goes. Continue reading Six Major Developments Shaping Finnish Cities: 2014 in Review

Changing Work Patterns and the Rise of Urban Innovation Districts – The Future in Finland?

The changing nature of how and where we work seems to be hollowing out Finland’s science & business parks and industrial areas. Is the geography of innovation shifting and leaving cities facing a choice between sticking with a landscape of vacant business premises and nurturing lively innovation districts?

Last month an over 10,000-strong horde of startup entrepreneurs, venture capitalists and media representatives flocked to Helsinki to attend Slush, a two-day technology and startup event that seeks to pair great ideas with investors. Even the Chinese Vice Prime Minister Wang Jang joined the party. This is quite noteworthy since the concept only got started in 2008 by a small group of Finnish entrepreneurs who wanted to bring the local startup scene together at least once every year. Now Slush is one of the leading tech and startup events in the world. Continue reading Changing Work Patterns and the Rise of Urban Innovation Districts – The Future in Finland?

Pro Helsinki 2.0 – The Urbanist Vision for Making Helsinki Denser and More Diverse

Today I have the great pleasure of introducing you to the alternative city plan for Helsinki that I have worked on with my fantastic colleagues from Urban Helsinki since early 2014. It’s our second land-use plan done completely in do-it-yourself fashion, and after the small project at the edge of Helsinki’s inner city we did some months earlier. I’ve written two posts about this project in Pikku Huopalahti, you’ll find them here and here.

Our experiences and insights from working with Pikku Huopalahti eventually got us even more excited about doing something substantial to stir up discussions about Helsinki’s future. The city has been in the process of drafting a new strategic city plan to guide the city’s growth until 2050. Once enforced, this plan will necessarily have a tremendous impact on what Helsinki will be like 35 years from now – for better or for worse. To help make sure it won’t be the latter, we decided to draft our own strategic plan. Continue reading Pro Helsinki 2.0 – The Urbanist Vision for Making Helsinki Denser and More Diverse

City of Boulevards or City of Malls? Urban Transport Infrastructure Retrofits Are Changing the Urban Landscape in Helsinki and Tampere

This article has been written in collaboration with Panu Lehtovuori and was originally published in Project Baltia's issue 22 "Infrastructure". Project Baltia is a professional journal covering architecture, urban planning, and design in North-West Russia, Finland, and the Baltic states. The journal is published in St. Petersburg. Panu Lehtovuori is an architect and urbanist. Currently he works as the Professor of Planning Theory at Tampere University of Technology’s School of Architecture. Not all images were published in Project Baltia.

Substantial infrastructure investments are currently reshaping Helsinki and Tampere, Finland’s two largest urban centres. The aim of most ongoing projects is to create new hybrid urban landscapes which will replace or modify large-scale transport infrastructures. These changes are taking place, in particular, around rail terminals and mid-20th century urban highways. The Finnish projects echo transformations in many European and North American cities, where single-use traffic zones are being converted to mixed-use neighbourhoods and parks to boost cities’ livability. Continue reading City of Boulevards or City of Malls? Urban Transport Infrastructure Retrofits Are Changing the Urban Landscape in Helsinki and Tampere

PehmoGIS-menetelmillä kohti asuintoiveita priorisoivaa kaupunkikehittämistä

Yksi nykypäivän kaupunkisuunnittelun ydinongelmista on, että suunnittelua ohjaa joukko rakenteita, jotka eivät osaa lukea 2000-luvun kaupunkilaisten käsityksiä kiinnostavasta ja hyvästä kaupunkitilasta. Useimmat kaupunkien rakentamiseen liittyvät lakimme, virastomme ja käytäntömme on nimittäin luotu aikana, jolloin palvottiin modernismin alttaria ja sitä myötä tuottamaan takavuosien suunnittelijoiden ihanteiden mukaista yhtenäistä kaupunkitilaa ihmislähtöisyyden kustannuksella. Continue reading PehmoGIS-menetelmillä kohti asuintoiveita priorisoivaa kaupunkikehittämistä

Can SoftGIS Tools Help Us Rediscover the “Human Element” for Shaping Livable High Density Urban Neighborhoods?

The field of geography is a brilliant academic discipline that gives you a thorough understanding of the world and lets you focus on whatever interests you. And being the urbanist geographer that I am, this summer I’ve been thinking a lot about what my colleagues could do to help with creating better cities. The more I’ve thought about it, I’ve begun to discover that the answer may lie in the area of specialization that I always liked the least: GIS. Continue reading Can SoftGIS Tools Help Us Rediscover the “Human Element” for Shaping Livable High Density Urban Neighborhoods?

Finnish Mall Enthusiasts Add Little Value to Local Economies

Jeez, not another mall”, I thought out loud to myself when I read that Helsinki’s City Board unanimously approved to reserve a 2.5-hectare piece of land in Roihupelto, in the middle of Helsinki’s eastern suburbs for the development of a new shopping destination. Two developers want to see new big box stores and to transform an existing modern but run down industrial building into retail space. If all goes as planned, construction of the shopping complex could start already this year with the introduction of Motonet, a chain that markets itself as a “department store for car owners”.

The other developer already owns a shopping mall called Lanterna that specializes in furniture and interior design just opposite to the proposed development’s site. I hear the numbers of shoppers visiting Lanterna have lately showed a decreasing trend, so I suppose this new project is strongly linked to wishes of attracting more customers to the area. Continue reading Finnish Mall Enthusiasts Add Little Value to Local Economies

Tampere’s Aimless Urban Strategy of Planning for Cars and People

I’ve mostly written about Helsinki in my blog but since I also follow many interesting planning projects and discussions elsewhere in Finland, I want to expand my geographical scope now and then to share thoughts and insights from different corners of this urbanizing country. May this be the first one of many more.

Beyond the beautiful streets of Helsinki, I’m especially actively curious about what’s going on in Finland’s second largest urban center, Tampere.

Tampere is located on an isthmus between lakes Näsijärvi and Pyhäjärvi, a bit less than 200km north from Helsinki. The city often gets dubbed as Finland's Manchester because of its industrial heritage. Map by Google Maps.
Tampere is located on an isthmus between lakes Näsijärvi and Pyhäjärvi, a bit less than 200km north from Helsinki. The city often gets dubbed as Finland’s Manchester because of its industrial heritage. Map by Google Maps.

Continue reading Tampere’s Aimless Urban Strategy of Planning for Cars and People

DIY Urban Planning Revisited – Progress Report for Urban Helsinki’s Pikku Huopalahti Proposal

In February I wrote about a planning activism project I and my like-minded friends – we now call our group Urban Helsinki – initiated to promote dense urban living for a development site in Pikku Huopalahti on the northern edge of Helsinki’s inner city. In a nutshell, the story is that the land developer hired three architecture firms to draft ideas for transforming the site from its current rather useless state into an infill neighborhood. The city will eventually make a detailed plan for the site reflecting the ideas and discussions that follow the proposals. Gratefully, the city gave us a chance to submit our proposal along with the so-called official ones.

At the time of my earlier blog post we had just handed in our work. Nothing like this had been done before, so what would follow was a mystery for everyone. Continue reading DIY Urban Planning Revisited – Progress Report for Urban Helsinki’s Pikku Huopalahti Proposal