Shufersal Reports Decline in Revenue and Profit Amid Sales Weakness in Q2
Shufersal, Israel's leading supermarket chain managed by controlling shareholders Yossi and Shlomi Amir, reported a continued decline in sales for the second quarter of 2024. The company recorded revenues of 3.4 billion shekels, down 7.5% compared to the same quarter last year. Net profit fell sharply by 34% to 125 million shekels. For the first half of the year, revenues totaled 7.1 billion shekels, a 1.6% decrease year-over-year, while net profit declined by 14% to 299 million shekels.
The company also experienced a significant drop in same-store sales, with an 8.6% decrease in Q2 and a 2.7% decline in the first half. Shufersal attributed the sales weakness primarily to the timing of the Passover holiday and a reduced impact from the "Roar of the Lion" promotional campaign. Additional factors included ongoing investments in store upgrades, closing unprofitable branches, opening new stores, and adapting store hours. The company is also implementing new logistics and technological infrastructure.
Despite the downturn, Shufersal announced a dividend distribution of 180 million shekels to reward investors. The retailer emphasized its continued focus on a customer-centric strategy, investing in digital growth, financial services, fresh produce improvements, direct meat imports from South America, brand expansion, and innovative technology adoption. Efforts to improve efficiency include managing rising labor costs and closing loss-making stores.
In real estate, Shufersal's property arm, Laro, is advancing with two transactions totaling approximately 154 million shekels, complementing previous deals with BIG in Rishon Lezion and Tadmor in Jerusalem. The company acquired full rights to the Kurdani complex in Kiryat Motzkin for about 85 million shekels and purchased commercial rights for a 2,700-square-meter project in Netanya's Havazelet HaSharon neighborhood for around 69 million shekels, where a Shufersal branch is planned. Additionally, Shufersal received a building permit for a new commercial center in the Ramot neighborhood of Beersheba.
