Musti’s core strategy is to continue developing its value proposition and to better serve its customers in the Nordic markets. Successful execution of Musti’s strategy can be expected to lead to strengthening its market leadership in the Nordic countries and improving profitability.
Winning new customers from a prospective clientele representing the Nordic pool of 5.2 million pets
Musti is well-positioned to continue winning new customers from the large Nordic pet pool of 5.2 million pets and gaining market share from the groceries and small independent pet specialists with the Musti concept, leading brand and customer focus. Musti’s market share gain in the grocery channel is expected to continue, driven by its leading customer service, high convenience, high-quality and exclusive offering, as well as adjacent services in selected locations.
Grow share of wallet within existing loyal customers
Musti has identified a clear opportunity to grow the share of wallet with its existing loyal customers. Those customers who spend below average form a large proportion of Musti’s customer base, but a small proportion of sales). There is significant upside from educating lower spending customers about the health benefits of premium food and encouraging them to conduct the majority of their food purchases at Musti, giving the company a possibility to capture a greater share of wallet. Futhermore, Musti focuses on cross-selling through targeted offerings aimed to promote additional product categories, as well as enhancing customer service.
Expand store network and number of service points
Musti aims to continue rolling-out further stores to win new customers through its strong concept attracting customers to switch to the Musti platform. Regardless of strong market presence in Finland, the company’s management continues to see opportunity to expand store network in selected locations, such as new hypermarkets and malls. In Sweden, focus has been on integration, efficiency and building brand awareness, and will now be turned towards store roll-out especially in Stockholm and other big cities, where the company is currently under-represented. In Norway, the company aims to continue its solid track of building presence, where it has since entry in the financial year 2017 grown to a network of 30 stores in three years.
Through the largest footprint in the Nordic countries, Musti can quickly gain further market share in the attractively growing pet services market, and the company continuously evaluates new service point openings.
Focus on driving gross margins through increased O&E share and leveraging scale
Musti has strong historical track record in driving gross margin improvement and is well-equipped to continue that going forward. Own and exclusive brands (“O&E“) typically have 10-15 percentage points higher gross margins compared to global brands. Musti sees potential to grow the O&E share of sales both in Sweden and Norway to Finland’s levels. In addition to scale benefits in procurement, the company has identified potential to further develop its pricing and procurement processes, rationalise its supplier base and develop category management.
Leverage broadly invested platform to drive operating leverage and scale benefits
Previous significant investments to Musti’s IT and warehouses are expected to drive increased operating leverage and scale benefits to further increase Musti’s profitability as topline growth is expected to continue while fixed costs can be spread across larger net sales.