Shufersal Ltd. (TASE:SAE) is embarking on a new path. The chain's board of directors yesterday approved a new business plan for the company "aimed at creating commercial and operational infrastructure for growth in the coming years, bolstering its ability to compete, and improving the value offered to the customer, including a cheaper shopping basket and better service," the company reported to the TASE this morning.
Shufersal 's management estimates that implementing the business plan will involve one-time expenses of NIS 200 million before taxes (NIS 150 million net after provision for taxes). Most of this will be reported in the company's financial statements for the second quarter of 2014, and is expected to have a negative impact on the company's business results in the coming quarters.
The plan includes:
An across-the-board price cut on the Shufersal Deal, My Shufersal, and Shufersal Express formats, and further price cuts on the Yesh format;
Narrowing of price gaps between the group of neighborhood branches (My Shufersal and Shufersal Express) and the group of discount branches (Shufersal Deal and Yesh);
Expansion and strengthening of Shufersal 's private brand;
Issuing a new uniform "Gold Coupon" for use in stores under the Shufersal brand name, without reductions from the value listed on the coupon, while cutting the discount rate on coupon purchases and the discounts for the customers clubs. These measures will contribute to price cuts for the public at large.
Accelerated development of the company's digital platforms;
Consideration of development and promotion of the company's new, existing, and supplementary activities;
Streamlining, among other things by gradually closing 15 branches with 40,000 sq.m. in aggregate space, reducing space in other branches by a total of 25,000 sq.m., saving on costs in branches, the supply chain, and the company headquarters, and a voluntary retirement plan with 300 employees cut.
At the same time, Shufersal says the company is sticking to its plan to open new branches totaling 15,000 sq.m. annually.
Shufersal CEO Itzik Abercohen said today, "As Israel's largest and leading retail food company, Shufersal is introducing a new business plan aimed at making the consumer product basket cheaper, improving customer service, reinforcing the company's ability to compete, and maintaining its leading position. The plan is based on the company's wish to contribute to a lowering of consumer prices, strengthening its commitment to the consumer with as much transparency as possible, and adapting the company's business to a dynamic competitive market.
He added, "I believe that implementation of these measures will mark a substantial contribution by Shufersal to lowering the cost of living for the consumer in Israel. Enlisting all parties in the economy in this effort will assist efforts to lower the cost of living in Israel."
Published by Globes [online], Israel business news - www.globes-online.com - on June 26, 2014
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