Victory Reveals Gaza Sales Drove Its Unusually Strong First-Quarter Growth

Victory was forced by Israel’s Securities Authority to clarify that most of its unusually strong first-quarter sales growth came from sales to Gaza. In a supplemental report published Thursday evening, the supermarket chain said that without Gaza-related sales, same-store sales growth at branches that also operated last year would have been only 5.95%, not 25.2%.

Victory was the first food retail chain to report first-quarter results this year. Its sales reached 755.8 million shekels, helped by same-store growth, new store openings, the timing of Passover, holiday promotions, and a sharp increase in electronics and household appliance sales. The company had not highlighted Gaza sales as a driver in its initial report, mentioning Gaza only in a general note saying it began supplying the Strip in January after being recognized by Israel as an authorized supplier.

The company later disclosed that about 99 million shekels of the quarterly jump came from sales to the Gaza Strip. It also said sales per square meter rose 18.8% to 10,100 shekels, but would have been 8,800 shekels excluding Gaza sales. Victory added that there is no certainty these sales will continue or at what volume.

The move likely reflected both the gap versus competitors and pressure on profitability. Rival Yohananoff posted 14.9% growth and Rami Levy’s Shuk Habishka reported 8.7%. Victory said gross profit rose 21% to 174.8 million shekels, but gross margin fell to 23.1% from 23.9%, citing higher wage and stocking costs, online growth, and lower-margin Gaza sales.