Food Chains’ “Ninjas” Expose the Price Paid by Electronics Importers
The ninjas of old were secret Japanese warriors who carried swords and shuriken and, in the Hollywood image, wore black clothes and masks. Fast forward about 500 years, and ninjas became radioactive turtles named after Italian artists, who eat pizza in the sewers and fight crime with the help of their rat mentor, Master Splinter. A few more decades passed, and today, at least in Israel, ninjas are mainly kitchen appliances. More specifically, they have become a symbol of the intensifying price war among food chains, which are trying to attract consumers and compete for the unofficial title of “the cheapest chain,” not only in food but also in the sale of electrical and electronic goods.
Central Bureau of Statistics data clearly illustrate the trend. A breakdown of private consumer credit card purchases in the first quarter of the year shows that the electrical and electronics sector recorded annual growth of 5.6%. That compares with a 0.4% decline in food and beverages and a 4.2% decline in clothing and footwear. Anyone who followed the first-quarter reports of publicly traded food chains could quickly see the impact of the trend on business results.
Victory reported a 25% jump in revenue and a 150% increase in operating profit compared with the same quarter last year. Behind those figures stand two main factors, the timing of Passover, which fell earlier this year and was included almost entirely in the first quarter, unlike last year when it extended into the second quarter, and the sharp rise in sales of electrical and electronic products. In its reports, Victory noted that after a pilot it conducted at the end of 2025, “during December 2025 the company began a pilot of selling home electronics and electrical products such as iPhones, televisions, vacuum cleaners, Ninja devices, etc. From the beginning of 2026 the company significantly increased sales of home electronics and electrical products. These are high sales volumes with a significant shekel margin. The company expects that later in 2026 sales volumes of home electronics and electrical products will increase significantly.”
This means that although electrical products are not necessarily characterized by high profit margins for Victory, the absolute cash profit from each transaction is enough to justify a substantial expansion of the activity later in the year as well.
The increase in food chains’ activity in the home electrical goods market is coming at the expense of the official importers who dominated it for years. Two major players in the field are traded in Tel Aviv, Brimag and Ralco. Brimag’s main activity is the import, marketing and distribution of home electrical and electronic products. Ralco operates through two main segments, its consumer products segment, its main profit engine, and the Zanussi agencies segment. In Ralco’s consumer products segment, refrigerator sales account for more than 70% of revenue, while dryers contribute about 10% more. As part of its Zanussi agencies business, the company imports and markets Zanussi home appliances, including ovens, cooktops, washing machines, dryers and dishwashers.
The financial results of Brimag and Ralco, in effect, provide a mirror image of those of the food chains. Brimag recorded a decline of about NIS 6.6 million in first-quarter revenue from the home products segment compared with the same period last year, along with a decline of about NIS 2.1 million in gross profit. In relative terms, that is a decline of about 7% in segment revenue and about 5% in gross profit.
Ralco, by contrast, which has greater exposure to large electrical appliances, a category in which competition from food chains is lower, posted increases of 10% in sales, 25% in gross profit and a 40% jump in operating profit. Most of the improvement came from the consumer products segment, where revenue grew by 6% and operating profit by 43%. On the other hand, the Zanussi agencies business saw a decline of about 56% in profit. Here too, it is important to remember two external factors that supported the results, the timing of Passover and the strengthening of the shekel, which improved import conditions and the companies’ profit margins.
In practice, the growth strategy of food chains directly hits the heart of the business model of small appliance importers. Beyond the fact that food chains sometimes use parallel importers, they also enjoy a significant structural advantage, selling electrical appliances is not their core business. As a result, they can settle for lower margins, use appliances as a way to attract customers and trigger price wars that official importers find difficult to withstand.
The problem for importers is sharpened by the characteristics of the industry. The electrical and electronics market is marked by strong seasonality, with sales peaks around Passover, the High Holidays, Black Friday promotions and specific events such as international sports tournaments that boost demand for television screens. In Brimag’s case, the third quarter of 2025, when most of the High Holidays fell, accounted for about 37.5% of its annual net profit. In 2024, when most of the High Holidays fell in October, about 46% of annual net profit was generated in the fourth quarter. The implication is that a significant share of Brimag’s profitability depends on a few peak periods during the year. When chains such as Victory or Osher Ad choose to expand activity precisely during those periods, they can significantly hurt the profits of official importers.
From the importers’ point of view, this is almost impossible competition. Food chains benefit from advanced logistics systems, wide national reach, significant purchasing power and financing sources based on ongoing food operations. When the sale of electrical products becomes only a complementary activity for them, they can price products far more aggressively than the players who depend on those products as their main source of income.
It should be noted that Brimag and Ralco are mainly importers and suppliers, not retailers. Most of their sales are made to large electrical chains, purchasing groups of independent stores and do it yourself chains. Brimag’s main customer is Traklin Electric. In 2024 and 2025, the chain accounted for about 12% of Brimag’s revenue. In addition, about 10% of the company’s revenue came each year from another retail chain, apparently Machsanei Hashmal, on which Ralco is even more dependent, with sales to the chain accounting for about 20% of revenue.
Machsanei Hashmal’s position as a major customer is not surprising. It is likely the largest electrical retailer in Israel, with an estimated market share of about 28% of industry sales. In the reports of Electra Consumer Products, the owner of Machsanei Hashmal, the continued growth trend in the market is visible. Revenue in the electrical retail segment rose by more than 10% compared with the same period last year. The main growth engine was large home appliances, whose sales grew by 24%, a figure that aligns well with the trend identified by Ralco. The computers, printers and gaming segment grew by 32%, television and audio system sales rose by 15%, while sales of small appliances grew by only 13%, a figure that may indicate stronger competition in that category.
The changes in the business environment, alongside the price war among food chains, are expected to force companies such as Brimag to adapt to a new reality. One direction the company has chosen is expanding activity with real estate developers. In this framework, Brimag supplies appliances for residential projects, and at the same time carries out transactions to acquire residential projects from those same parties. In this way, it is trying to reach new customer audiences, reduce dependence on the traditional retail market and diversify its sources of income. It is not certain that this is an ideal time to increase investment in residential real estate, but from Brimag’s perspective it may be one of the few remaining growth paths.
As food chains become an increasingly significant player in the electrical goods market, veteran importers are required to find new growth engines, or adapt to a reality in which the ninja is no longer only on the appliance shelf, but also in the neighborhood supermarket branch. The bottom line is that changes in the business environment, along with the price war against food chains, are expected to force companies such as Brimag to adapt to a new reality, reduce dependence on the traditional retail market and diversify their sources of income
The author is an investment manager and analyst. The information in this article does not constitute investment advice, a recommendation to carry out securities transactions, or a substitute for investment advice that takes into account the special data and needs of each person. The author and/or the newspaper are not responsible for any damage, loss or expense caused as a result of use of this information. Investing in the capital market involves the risk of financial loss. The author has or may have an interest in each of the companies mentioned in the article.
