King Store Supermarket Chain Eyes Tel Aviv Expansion and IPO

King Store, the largest Arab supermarket chain in Israel, is planning a significant expansion into the general market, including opening a flagship store in Tel Aviv and aiming for an initial public offering (IPO).

The chain, controlled by brothers Muhammad and Bilal Al-Mashadawi who hold 80% of its shares, recently completed a NIS 10 million renovation of its branch in Rosh Ha'Ayin. The company's CEO, Majdi Katani, stated that King Store is the largest Arab supermarket chain and has successfully adapted its operations to serve both Arab and general populations. He noted that approximately 80% of customers at the Rosh Ha'Ayin branch are from the general sector, highlighting the company's ambition for businesses from the Arab community to "take a leap forward and have a voice in the general market's shopping basket."

King Store's annual revenue is estimated at NIS 1.1 billion, with a gross profit margin of about 23%, comparable to Rami Levy. The chain operates 30 stores, averaging 2,500 square meters each, and employs around 1,500 people. Notably, King Store does not sell alcohol or cigarettes due to religious and ethical reasons, respectively, but offers a wide range of non-food items, including discounted electric bicycles, to attract customers.

Plans for an IPO were previously considered about a decade ago when Phoenix Insurance acquired a 20% stake for approximately NIS 40 million, intending to facilitate an IPO by 2022. However, these plans were stalled by the outbreak of the war in October 2023. The company is now refocusing on finding a suitable location in Tel Aviv for a new store, which will also operate on Saturdays, before proceeding with the IPO.

King Store believes that institutional investors may be hesitant to invest in a chain primarily serving the Arab sector, hence the strategic move to broaden its appeal to the general market. Despite this expansion, Katani believes the chain has significant untapped potential within the Arab sector, estimating a possibility of reaching 150 branches.