Roots of cooperative activities
Cooperative activities emerged from consumers' daily needs. In the nineteenth century, many private merchants in Europe aimed for maximum profit, used spirals of debt to coerce people into continuing their customer relationships whilst neglecting product quality and hygiene. Cooperatives were established in response to these phenomena.
Employees of the Vyborg workshop established the first cooperative society in Finland in 1882. According the rules of the Helsinki General Nutritional Society, which was established in 1889, its stores were open to all, selling on credit was strictly forbidden, all members had one vote and surplus was distributed primarily according to the volume of purchases and secondarily according to shares.
Open membership, democracy and the distribution of surplus according to the use of services continue to guide S Group's operations.
1900–1920 – Rapid expansion and separation into divisions
The cooperative principle spread rapidly in Finland in the early twentieth century. The oldest cooperative still in operation in Finland is the Vähäväkinen Cooperative Society. Established in 1901, it developed into what is now known as the Turku Cooperative Society.
SOK Corporation was established in 1904 to manage joint purchases and provide advice and guidance. SOK's first production facilities were established in Helsinki between 1914 and 1916. They included a knitting shop, a brush factory, a chicory factory, a coffee roasting plant and a seasoning and tea packing plant.
In 1916, cooperative activities were divided into capitalist and working-class operations. Up until that point, the cooperative movement had been developed as one. The division reflected the strong political division in Finnish society.
1920–1950 – Golden era and wartime
Cooperative activities within what is now S Group became a key factor in the Finnish economy and a significant aspect of Finnish society between 1920 and 1950.
SOK was the leading wholesale business in Finland in terms of purchasing power. In addition, it established a significant number of industrial enterprises to ensure the availability and high quality of goods.
Business ideas were developed and the service network was strengthened in all sectors. The seeds for chain operations were planted. New members were acquired and existing customer relationships were enhanced. S Group was a pioneer of the customer loyalty approach in Finland.
Training provided for employees has been an integral part of S Group's operations since the very beginning. The SOK Cooperative Enterprise School was established in 1919. The first courses in Jollas in Helsinki were held in summer 1950.
1950–1970 – First department store
The first Sokos department store in Finland was opened on Mannerheimintie in Helsinki in 1952, the year of the Helsinki Summer Olympics. The Vaakuna Hotel began operating in the same building. Sokos soon developed into the best-known brand of S Group, and smaller stores and units in other business areas, such as machinery and hardware stores, were named Sokos. At its peak, there were more than 100 Sokos stores in Finland. Hotels were named Sokos Hotels, after the group's best-known brand.
In the post-war years, S Group started to build department stores and hotels systematically in the centres of cities. Hotel and restaurant operations grew into a significant business area, alongside retail.
In the 1960s, the structural change in society was reflected in S Group. The larger the number of people who left rural areas, the tighter S Group's situation became, as its operations still primarily relied on rural communities.
1970–1980 – Second period of crisis
The second period of crisis in cooperative activities began in the late 1960s and lasted until the mid-1980s, driven by differences of opinion between rural and urban areas.
Nevertheless, operations were expanded to cover new sectors. The sale of agricultural supplies was enhanced, and SOK engaged in the automotive trade. Retail operations developed as well. The Keskimaa Cooperative Society opened Finland's first hypermarket, Prisma, in Seppälä in 1972, and the S-market chain was established at the end of the 1970s.
In the 1980s, all cooperative societies found themselves in a tight economic situation. They only survived with the help of savings associations and by selling property.
1980–2000 – Extensive reform and new growth
The 1980s marked structural reform for S Group. As a result of an extensive reorganisation project launched by CEO Juhani Pesonen, SOK divested its industrial operations and created the network of regional cooperatives that is still in operation. The current, unified S Group consists of SOK Corporation and the regional cooperatives.
In the 1980s, the Group focused on its core business areas and restored profitability in just a few years. Since the 1990s, its operating principle – the provision of services and benefits for loyal co-op members – has served as the foundation for its business planning.
The development of its present co-op member programme began in the late 1980s, when PeeÄssä, Keskimaa, KPO and Turku became the first cooperative societies to adopt the Bonus system. The system was implemented nationally in 1994, covering all business areas and regional cooperatives.
In the early 1990s, cost-efficiency was further improved through modern chain operations, which are based on centralised procurement, among other operating methods. S Group and Tradeka transferred their procurement, storage and distribution of groceries to Inex Partners, a procurement and logistics company established in 1991. Through chain-based operations, Inex delivered products to all of the retail chains of S Group: Prisma, Citysokos, Alepa and Sale stores as well as S-markets.
In 1995, S Group entered the international markets when it opened a Citysokos store in Tallinn, Estonia.
A new chain was established in December 1998, when the Ympäristö Cooperative Society opened the first ABC service station store in Utti.
2000s and beyond – Reforms based on core values
Procurement within S Group is managed through procurement companies in a centralised manner. In early 2006, Inex Partners became a wholly owned subsidiary of SOK. Intrade Partners, a consumer goods procurement company, merged into Inex Partners in 2010. In 2012, S Group opened a new logistics centre for the consumer goods trade in Sipoo. More than 90% of the energy it uses for heating and cooling is renewable.
The Kodin Terra chain of hardware, interior decoration and garden stores was established in the 2000s. The first Kodin Terra store was opened in Lahti in 2005, and the total number of Kodin Terra stores stood at 11 by the end of 2011.
In the 2000s, the ABC chain of service station stores and fuel stations was expanded to cover the entire country. It was the Finnish market leader in petrol sales at the end of 2014.
Banking operations were launched by S Group and the S-Bank was established at the end of 2007. At the end of 2011, S-Bank had around 2.5 million customers. In 2014, S-Bank and LocalTapiola Bank were merged to create the new S-Bank.
In the 2000s, S Group expanded its operations in the Baltic countries and Russia. The Hotel Viru in Tallinn became a part of the Sokos Hotels chain in 2003. In 2007, a hotel business was launched in St. Petersburg, Russia, and supermarket trade started there in 2008.
By the end of 2014, SOK had eight Prisma stores in Estonia, five in Latvia and four in Lithuania. In addition, it had nineteen Prisma stores in St Petersburg.
In the 2010s, S Group has made rapid progress in developing digital services, such as the highly appreciated, award-winning S-mobile service.