Two supermarket chains which are liable to be hit by the Supreme Court's ruling that the Tel Aviv-Jaffa Municipality must enforce municipal bylaws prohibiting the operation of businesses on Saturday are Dor Alon Energy in Israel (1988) Ltd. (TASE:DRAL) subsidiary AM:PM City Market Ltd. and Tiv Taam Holdings 1 Ltd. (TASE:TTAM). The distinction and advantage of both chains over their competitors is their opening hours, including Saturdays and holidays, and their product mix.
Although both AM:PM and Tiv Taam refuse to disclose what proportion of their sales are made on the Sabbath, market sources estimate that the figure is substantial, possibly more than 20% of total sales.
Tiv Taam admits that it will have to close its stores on Saturdays and holidays, which is liable to materially affect its revenue and business results. In its financial report, it says that laws and regulations over Saturday business hours pose a unique risk to its business. It adds, however, that it cannot quantify the damage to its revenue, because some Saturday shoppers will buy on weekdays.
But if Tiv Taam loses its Saturday advantage, it is liable to lose customers to other retailers. In its financial report, the company says that the fines it pays for keeping stores open on Saturdays are immaterial.
Tiv Taam has 30 supermarkets, including 11 in Tel Aviv. AM:PM has 45 supermarkets, including 39 in Tel Aviv.
Tiv Taam CEO Adi Cohen told "Globes" today, "We're still studying the ruling. The ball is now in the Tel Aviv Municipality's court, and it will have to decide its policy. I am sure that it will set a policy to preserve the interests of all of the city's residents."
AM:PM declined to disclose how much of its sales are made on the Sabbath and holidays. It said that it was studying the ruling.
Published by Globes [online], Israel business news - www.globes-online.com - on June 26, 2013
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