Competition to Carrefour: Shufersal will establish in Israel the Dutch supermarket chain SPAR


by Ifi Reporter Category:Financial Dec 28, 2022

Shufersal signed a memorandum of understanding for the establishment of the Dutch SPAR chain in Israel with an investment of tens of millions of shekels, and for the sale of its own brand, which will compete with Carrefour's own brand. The agreement is subject to the approval of SPAR Global and the approval of the Competition Authority. As I recall, at the time Beitan Wines was also in talks with the Dutch, at the same time as negotiations with Carrefour, but in the end chose the French chain.

Shufersal will hold 20% of the corporation's shares under the control of Amit Zeev, former CEO of Yanet Beitan, who received the SPAR representative in Israel in a license agreement, which includes, among other things, the right to establish SPAR stores in Israel as well as the right to import and market 10,000 products under the private label. Shufersal will actually receive the franchise The intention is to open at least 10 branches in Israel in the next three years, mainly neighborhood stores with an area of up to 1,000 square meters, and to sell the chain's products exclusively in Shufersal stores in various formats, in addition to selling them in the new and independent SPAR stores. Zeev will serve as CEO of the joint company.
SPAR has 13,623 stores worldwide, operating on local partner models in 48 countries, serving 14.5 million customers every day. The company's annual sales turnover in 2021 was about 41.2 billion euros. Its annual growth rate stands at an average of about 1.5%, and according to the forecasts of the global SPAR, the chain is expected to reach a sales turnover of 50 billion euros in 2025.
Shufercell Group CEO, Uri Waterman: "Shufercell is examining and promoting a number of growth engines, one of which is cooperation with an international network. Global SPAR products will be marketed at fair prices that are significantly lower than usual in Israel, thus contributing to lowering the cost of living in Israel."
Amit Zeev: "In the last few months, I have been involved in forming the group of partners who together will establish the SPAR network in Israel. I have conducted negotiations with several retail chains in Israel and SPAR is the largest and most professional, and I am happy and proud of the partnership. I am confident that together we will be able to bring about a real change, to give the customer a new shopping experience that includes the quality of products and service that we all know from Europe alongside prices that surprise every Israeli when he visits a supermarket across the continent."
The real contribution to competition in the food industry with the entry into Israel of the two giant foreign chains Carrefour and Safar, is not their mere entry after years in which no chain has penetrated Israel, but rather the fact that it is expected to shake the control of the major food suppliers in Israel - Strauss, Assem, Unilever, Diplomat, etc. ' from the shelves of writers in Israel, which may cause them to experience a significant decrease in income.
Today, only 10 food and consumer product suppliers control 60% of the Israeli food market, which is considered highly concentrated and without really significant competition. This is why brands such as Yellow Valley cheese, Esem ketchup, Elite Turkish coffee, and more, reach rare market shares of 75% or more.
Now the private brands of Carrefour and Spar will appear on the shelves, bringing with them a foreign fragrance that the local consumer loves so much, in almost every field in which the Israeli manufacturer-suppliers are engaged. According to the new chains, the prices of the products should even be cheaper.
It is true that the Israeli consumer is conservative and loyal to the tastes he knows, but when the food chains themselves own the private brand, they have an interest in promoting it at the expense of the local suppliers with whom they have long battles and accounts claiming that the suppliers' profits are excessive.
Tzvika Williger, the owner of Willipod, a food products importer, was indignant over the weekend in an interview he gave to Ynet and "Yediot Ahronoth" about the fact that he does not receive the middle shelf in the chains, but the side shelves for his imported products, for example in the milk sector, and that the answer he receives from CEOs The chains are that "Shatnova and local manufacturers sell better than him". In the case of the retail brands that Carrefour and Spar are now bringing in themselves, and will probably be more profitable for them, it is assumed that we will see them standing on shelf and display areas in "prime location", which will make us reach out. At the same time, the local chains will benefit from the reduction of dependence on the local suppliers (see Shufersal's surrender to Tnuva). This is a tremendous bargaining chip to improve their trading conditions with them.



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