Israel's largest supermarket chain reported lower profits and slower revenue growth.
Despite the timing of the Passover holiday, which benefitted sales in the first quarter, Shufersal Ltd. (TASE:SAE) saw revenue increase by only 1.1% to NIS 2.824 billion in the first three months of the year due to price cuts. Shufersal is Israel's largest supermarket chain with 281 outlets and commercial space covering 529,000 square meters.
Shufersal lowered prices in the first quarter and consequently revenue growth slowed. Gross profit fell 9.2% in the first quarter to NIS 630 million, 22.2% of sales, from NIS 694 million, 24.7% of sales in the corresponding quarter. The chain also reported an operational loss of NIS 3 million, compared with profits of NIS 33 million in the corresponding quarter. Net profit fell 59.3% to NIS 13 million from NIS 32 million in the corresponding quarter.
Shufersal's price cuts are designed to enable the supermarket chain to compete in the more competitive climate and bring back customers who are now shopping at discount chains.
Published by Globes [online], Israel business news - www.globes-online.com - on May 18, 2015
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Shufersal