Electra Considers Ending Carrefour's Participation in Israel's State Basket Program Over Profit Concerns
Electra Consumer Products is evaluating whether to discontinue Carrefour's involvement in the Israeli government’s "State Basket" initiative after the current six-month extension, despite having the option to continue. The decision stems from the program’s negative impact on Carrefour’s profitability, even though it attracted new customers. Electra’s chairman, Tzvika Schwimer, noted that while the initiative brought more shoppers, it also eroded gross margins, prompting management to reassess if the increased traffic justifies the financial hit.
Launched in April by the Ministry of Economy, the "State Basket" program designates a single retail chain to offer a fixed, discounted price on 100 essential products, supported by a government advertising campaign worth about 50 million shekels. Carrefour was the sole bidder and participant, initially applying the discounts in around 50 stores and online, with purchase limits per product. The program faced criticism for limiting competition, not reflecting typical family shopping baskets, and subsidizing a private retailer’s advertising.
Electra’s food retail sector, which includes Carrefour, saw a 2.6% revenue decline to approximately 818 million shekels in Q2 2026 compared to the previous year, with same-store sales dropping 7.2%. Despite this, the food segment’s profitability slightly improved. Meanwhile, Electra’s sports and leisure division experienced strong growth, with revenues up 31.7% and a swing from a 5 million shekel loss to an 11 million shekel profit in the quarter, driven by increased Adidas sales.
The electrical appliances sector showed mixed results, with a 3.9% revenue decrease but improved profit margins due to lower costs and currency effects. Overall, Electra Consumer Products reported a 1.7% revenue increase to about 1.82 billion shekels and higher operating profits in Q2. However, Carrefour’s challenges persist amid ongoing leadership changes, including the recent CEO transition from Michael Luboshitz to Inbal Harson. The company is likely to decide soon whether to continue the "State Basket" campaign beyond the current term.
