Yeinot Bittan targets haredi market

Shefa Shuk store, photo: Assad Mordechai
Shefa Shuk store, photo: Assad Mordechai

Shefa Shuk stores and dozens of Yeinot Bittan branches will be converted into a new haredi chain.

On December 25, Yeinot Bittan will launch a new haredi retail chain with 25 branches, sources inform "Globes."

The new chain will include 11 Shefa Shuk and 10 Yeinot Bittan stores converted to the new brand, as well as further branches to be opened later on.

As far as is known, the brand under which the chain will operate is yet to be chosen, but it will probably be distinct from the Yeinot Bittan brand.

Shefa Shuk used to be Mega's sub-chain for haredi and disadvantaged populations. As part of the acquisition of Mega, Yeinot Bittan also acquired the remaining Shefa Shuk stores.

According to the plan, all existing Shefa Shuk branches will be converted into the new haredi retail chain, excluding three: the branches in Migdal Haemek and Kiryat Ata, which the Antitrust Authority directed Yeinot Bittan to sell due to concentration issues; and the branch on Petah Tikva's Shtamper Street, which Yeinot Bittan plans to convert into a "Mega in the City" branch.

Yeinot Bittan branches currently operating in haredi population centers will also become part of the new chain. These are the branches in Ashdod, Petah Tikva, Tiberias, Afula, Netanya and the chain's two Jerusalem branches, in the Neve Yaakov neighborhood and on Reines Street, a branch situated near Osher Ad and Rami Levi Mehadrin stores.

The haredi population prefers to shop in branches where all products on the shelves have a strict level of kosher supervision, are adapted to its consumer habits (for example, large packages) and where employees are dressed appropriately. Yeinot Bittan probably believes that converting these branches to the new chain will bolster sales there.

From Mega to Yeinot Bittan, with a new concept

Since it acquired Mega, Yeinot Bittan has continued operating its stores under the same brand, and this is unlikely to change in the future. The key reason lies in the significantly higher levels of gross profit of "Mega in the City" stores, which Yeinot Bittan seeks to maintain.

However, not all "Mega in the City" stores manage to contend with local competition. Therefore, sources told "Globes", the chain intends to convert Mega branches in Jerusalem's Malha Mall and Ramat Gan's Ayalon Mall to Yeinot Bittan branches, which will operate under the chain's new slogan: "Everything that is good in the marketplace."

The chain plans to invest millions in renovating the stores in order to provide the customer with a unique shopping experience. Prices in these branches will also go down, and they will operate as discount branches.

Estimates are that at present, the strongest player in Jerusalem is Rami Levy Chain Stores Hashikma Marketing 2006 Ltd.'s (TASE:RMLI), but in the past few years it has been challenged by the success of Osher Ad, which opened additional stores in the capital, even penetrating into Rami Levi's traditional stronghold - the Talpiot neighborhood.

In Ramat Gan, the Ayalon Mall Mega branch is situated across the road from both Osher Ad and Rami Levi branches. In both of these areas, Yeinot Bittan will have to offer added value in order to contend with the competition and enjoy the substantial customer traffic in both of the malls. However, it remains to be seen whether mall visitors, who come for other reasons, will also stay there to do their weekly shopping.

Published by Globes [online], Israel business news - - on November 7, 2016

© Copyright of Globes Publisher Itonut (1983) Ltd. 2016

Shefa Shuk store, photo: Assad Mordechai
Shefa Shuk store, photo: Assad Mordechai
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