Israel's largest supermarket chain Shufersal Ltd. (TASE:SAE) is expanding its cooperation with credit card company ICC-Cal, sources inform "Globes." The two companies are currently creating a number of new sub-customer clubs for a joint credit card in order to appeal to specific population segments.
The two companies plan to launch five different sub-customer clubs, each of which will appeal to a different market segment. As far as is known, one of these, called Shufersal Baby, will be aimed at young parents, offering special benefits for baby products, such as baby food and diapers.
Shufersal, headed by CEO Itzik Abercohen, has been making great efforts to atteract customers to its credit card since ending its agreement with credit card company Max (formerly Leumi Card) and replacing it with ICC-Cal. The new measure follows a joint launch with El Al Airlines late last year through ICC-Cal in an attempt to expand its market.
In November 2019, Shufersal announced its cooperation with El Al, in which customers holding El Al's Fly Card would be able to accumulate double points when shopping at Shufersal, and holders of a Shufersal credit card would be able to accumulate points in the frequent flyers club of El Al, which is currently struggling with the coronavirus crisis.
Max launched its own credit car in recent months with benefits for El Al flyers in order to take market share away from Fly Card, which is also operated by ICC-Cal.
In late 2017, ICC-Cal, managed by CEO Levy Halevy, won Shufersal's customers' club, hitherto managed by Max (then still called Leumi Card), following a decade-long partnership. The switch to ICC-Cal caused great friction between Shufersal and Max, including legal proceedings.
Shufersal Finances, founded in 2006, issued credit cards to members of the Shufersal customers' club. In July 2017, Shufersal acquired Paz's shares in Shufersal Finances until the final separation between Max and Shufersal earlier this year, following a long, complicated arbitration.
Shufersal decided to renew the agreement with Max competitor ICC-Cal, which made it a more aggressive offer, due to the importance of the retail chains' customers' clubs, especially Shufersal's club. The Shufersal club is the most attractive for the credit card companies, together with the airlines' customers clubs, because it provides access to a large number of customers, and because these cards have high usage rates.
The credit card club of Shufersal and ICC-Cal is one of the largest in the non-banking credit cards market. The parties are now searching for ways to enlarge it by focusing on specific market segments.
Shufersal's third quarter report shows that the company has 586,000 customers for its new credit card with ICC-Cal, compared with 462,000 in the corresponding quarter in 2018.
Shufersal and ICC-Cal declined to respond to the report.
Published by Globes, Israel business news - en.globes.co.il - on March 1, 2020
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