Carrefour private brand already cutting prices in Israel

Published date21 November 2022
Publication titleGlobes (Rishon LeZion, Israel)
Carrefour is the largest international supermarket chain to have ever entered Israel. The company has annual sales of €81 billion from nearly 14,000 branches in over 40 countries. Carrefour is also one of the world's biggest food manufacturers with hundreds of production plants worldwide with 14,000 food and household products under the 20 brands that it owns

Electra Consumer Products (TASE: ECP), which is bringing Carrefour to Israel, is pinning its hopes on Carrefour's thousands of private brand products. Since June, Electra Consumer Products Mega and Yeinot Bitan supermarket chains have been selling 50 of these private brand products, which have been gradually introduced onto the shelves, and the company is now for the first time publishing data about these sales.

"The influence of the brand in the categories in which it is a player has been big," says Carrefour Israel CEO Uri Kilstein. "Last week, for example, it was the biggest player in the coffee capsules category and surpassed the sales of Elite, with a 47% share of the total amount sold.

"Another interesting thing is that the entire category grew significantly, both in sales and profitability. We see players in the market cutting the prices of their capsules, and that makes us happy, because it demonstrates the start of a broad impact on the market."

The case of Rami Levy

Another example that Kilstein gives is olive oil that is being sold for NIS 11.50 after winning a Ministry of Economy and Industry tender. "Its price is significantly lower compared with other olive oil brands, which are sold for NIS 30-40. In our stores it has risen to an 81% market share.

"The market reacted to the low price, and we see players like Rami Levy who cut prices to NIS 13.90 per bottle for a certain period, then raised it to NIS 17.90, because they really don't have the ability to deal with such a low price for long. "As a result of the price cuts in the market that the Carrefour brand led, prices dropped dramatically in the entire market. Storenext reports found that before the launch of the brand, the average price of olive oil in the market was NIS 29.1, and after the launch the price fell to NIS 23, which is a 21% drop. The point that is interesting is the across-the-board effect that such moves have."

According to Electra Consumer Prodct's data, the sales share of Carrefour's premium chocolate bars was 56% of the entire category, and cornflakes (a product comparable to Telma's cornflakes) was 25%. Kilstein...

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