Today, one year after completing the acquisition of New Pharm from Hamashbir 365 Holdings Ltd. (TASE:MSAH), Shufersal Ltd. (TASE:SAE) launched the new pharmacy chain Be in the Midtown Towers. Shufersal is trying to rejuvenate the chain, which has changed managers many times and stagnated over the years.
The keynote speech at the ceremony was delivered not by Shufersal's chairperson or CEO, but by Minister of Economy and Industry Eli Cohen, who spoke about his ministry's measures to "lower the cost of living" and the price transparency bill, saying, "There were private brands that did not create an alternative where the price was concerned. Today, there is an important step towards competition and reducing concentration in Israel. Wherever a new chain bearing good news for consumers is launched, I will be there."
Speaking after Cohen was Shuferal chairperson Mauricio Wior, who came from Argentina on the occasion of the launch and the results published by the group last week. "Not every day do we launch a new chain. We will bring a new concept, a new level of prices," he said. Shufersal CEO Itzhak Aberkohen added, "We now sell tens of thousands of items online; five years from now, we will sell 20,000 items online."
What innovations with the new pharmacy chain bring? Six concept stores were launched today and four more stores will be opened in the coming weeks, which will give the chain 72 branches by the end of 2018.
In diversification, Be promises 1,000 of its private brand products, and will simultaneously sell Shufersal private brand products. Be's private brand producs will be in the baby, men's, toiletries, textile, paper products, makeup, accessories, and Zohara socks and stockings categories. The chains also says that hundreds of additional private brand products in a broad assortment of categories will be launched in 2019, including drugs and food supplements. Be stated, "We hope to issue a private brand with non-prescription drugs in 2019. We believe that we will be able to sell non-prescription drugs online in 2019."
The chain is also issuing exclusive cosmetics products, including those made by brands that have never operated in Israel. Among the new makeup products brought to Israel by the chain are Pretty by Flormar, The Balm by Yves Rocher, Catrice, and Ofra. Men's personal care products will also be marketed, and spa and the sale of personal care products under the Chill brand in the style of products at Laline, for example, will begin.
Last summer, "Globes" revealed that Shufersal was planning to open stores at the rate of 8-12 stores a year for the next five years, givingthe chain 100 branches, and to double its current sales turnover of just over NIS 500 million.
One of New Pharm's prominent disadvantages, at least up until now, has been its geographic deployment and the unattractive locations in which it operates, in addition to shopping experience that does not provide added value and the lack of an ecommerce website. With the launch, Shufersal will try to change this picture and convince consumers that it provides new value.
Shufersal's challenge will be to compete with Super-Pharm, currently the dominant player in the pharmacy market with 240 branches, in what has become a synonym for an attractive shopping experience among consumers in Israel, in stark contrast to what New Pharm has offered. In contrast to the supermarket chains, which consumers visit at least once a week to buy fresh produce, bringing customers to shop regularly constitutes a challenge for the pharmacy chains, which rely on pharmacies and the sale of loss leader products such as baby food or diapers as a tool for bringing customers into the branch.
Published by Globes, Israel business news - en.globes.co.il - on November 27, 2018
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