Rami Levy Chain Stores Hashikma Marketing 2006 Ltd. (TASE:RMLI) says that he will open three neighborhood supermarkets, two in Tel Aviv and one in Haifa, in addition to one opened a month ago in the Ramat Eshkol neighborhood in Jerusalem.
At 300-700 square meters per branch, the neighborhood supermarkets will be smaller than the chain's other stores. The company plans to begin opening 10-20 neighborhood branches a year, reaching 80 such supermarkets within a few years by either building the stores itself or buying existing stores or chains.
Simultaneously with its expansion into neighborhood supermarkets, Rami Levy plans to expand its deployment of large discount stores. The chain opened a new branch in Holon yesterday, and plans to open another in Kiryat Gat in the coming months and reach 50 stores by the end of the year. These stores will have 3,500 square meters each. Additional stores are slated for opening in Ashkelon and Atarot in the first half of 2018.
Rami Levy published its financial statements today, showing a 2.8% dip in same stores sales. Rami Levy's explanation of the drop is likely to come as a surprise at a time when StoreNext is reporting a 4% price hike at the food chains. He stated, "We have cut prices in the chain by an average of 6% per product, in comparison with the corresponding period last year. We have done something different than our competitors. We are getting discounts from the supplier and passing them on to the customer."
According to Levy, 90% of the prices at his neighborhood supermarkets will be the same as at the discount stores, while there will be local bargains for 10%, depending on competition in the area and demand, with prices being up to 6% higher than at the discount stores.
Levy added that his chain's private brand currently accounts for 15% of its sales, and he intends to increase this to 25%, compared with 12% of sales at the end of 2016. For the sake of comparison, Israel's strongest private brand, current that of Shufersal Ltd. (TASE:SAE), currently accounts for 21% of Shufersal's sales.
Levy is expected to expand his chain's private brand to new categories, such as fresh milk and catsup. Asked about Shufersal's launching of its private cola brand this week, he answered, "Yes, we may also get into that. We'll be in all of the categories."
Published by Globes [online], Israel Business News - www.globes-online.com - on August 29, 2017
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