The appointment of Ofer Bloch as CEO of Shufersal, two and a half weeks after Itzik Aberkhan announced his resignation, places the largest food group in Israel in an exceptional position for it. “To the sea that has grown in the industry. He has already received quite a bit of criticism for this, since the appointment was announced last weekend.
But the food world is no stranger to bloom completely. Although in his last positions he served as CEO of the Hadera Paper Group, CEO of Netafim and President and CEO of yes, in the past he served for about five years as CEO of Tnuva Dairy. He left the group after 17 years, after winning the establishment of the largest dairy in the Middle East at the time, with an investment of $ 200 million. Bloch was also responsible for formulating and implementing Tnuva’s branding strategy, in which the corporation’s brand was rebuilt.
The main question now being tested is how Bloch will fill Abercahn’s big shoes, and how the relationship will be between him and chairman Yaki and Damani, who appointed him to the position (see more below). Shufersal is also in a challenging period for her, so Bloch has quite a few tasks ahead For immediate treatment.
The process of selecting the CEO began with 30 candidates, and was reduced to only two. The failure of the new CEO.
In his various roles, Bloch, 62, is considered an considerate and settled manager. “This is his fifth CEO position, he knows how to manage huge systems, and ultimately manage it manage,” Oren Hellman, the IEC’s VP of marketing and regulation, told Globes. “When a large company hires an outside CEO, there is great uncertainty, but in the electricity company it dissipates it very quickly, in just a few days. When there are crises and issues that pose a great challenge to society, he goes into great detail.
“Every company has whole worlds that it deals with, especially large companies like the Electric Company and Shufersal. Bloch knows how to absorb things in a very short time, and adapt his world to the content world of the company.
“Plus, he’s constantly thinking about the customer’s side. He’s made a lot of changes to the IEC issues because he wanted to keep the customers. That’s the answer to all the comments around about his inexperience in running a retail company. IAI can only stand a pilot. “
The director general of the Israeli Marketing Association, Thelma Biro, who works alongside Bloch in his role as chairman of the association, mentions that “when Aberkhan took over the position after Effi Rosenhaus, who was very charismatic, there was a period of turmoil.” This big one, and later he turned out to be one of the great CEOs who was at Shufersal. I have no doubt that under Ofer’s leadership, Shufersal will grow and flourish. Apparently the board of directors understands that he is the right man for the job. “
Shufersal’s numbers
Shufersal, which has been operating without a controlling interest since 2020, is currently traded at a value of about NIS 7 billion. The chain includes 393 branches, a little more than 300 of them Shufersal branches and the rest of Be’s pharma branches, with retail areas of about 540,000 square meters. This is in addition to nine delivery centers, with an area of about 36,000 square meters. When Aberkhan just took office, the chain had 267 branches, with a total area of about 558,000 square meters.
The chain’s annual revenue currently stands at about NIS 15 billion, and the net profit in 2020 reached NIS 387 million. Shufersal’s financial statements for 2021 are due to be published soon, and despite the relative weakness it presented in the third quarter, it can be estimated that the upcoming reports will also present a positive picture.
One of the major strengths attributed to Abercrombie, which is expected to end its role at the end of March, is to increase the network’s online activity – currently about 20% of sales come from the site. It should also be noted that the customer club has more than 2 million members, of which 660,000 hold its credit card, which is issued by ICC.
During Aberhahn’s years as CEO, he strengthened the chain’s dominance in the market, among other things by opening new branches and expanding its areas of activity. Thus, about five years ago, Shufersal acquired the Pharm Be chain, and in recent years has developed financial services through strategic cooperation with Discount Bank The chain is also expanding its sales area to businesses, and continues to develop and improve the real estate assets it owns. Recall that at the beginning of the month it was announced that the chain intends to acquire 60% of the shares of Mini Line, an importer of electrical products and owner of the ALM chain of stores.
Itzik Aberkhan, the retiring CEO / Photo: Sivan Farage
Two months ago, it was reported in Globes that Shufersal was interested in purchasing a stake in El Al’s frequent flyer club, and earlier it was reported that the chain was interested in entering the field of stock stores. In addition, contacts were made for the purchase of the Kravitz office equipment chain.
The acquaintance with Vadmani
As mentioned, the person who appointed Bloch to the position is Yaki and Damani, chairman of Shufersal, who himself took over the position about a year and a half ago, in October 2020. Vadmani came to the chain with rich experience in the food and retail sector Of Rami Levy on the network), as CEO of Tempo and as VP of Elite. This is why the appointment was received then by surprise in the market, and also in the company itself, and some foresaw the great potential for frictions and disagreements with Abercrombie.
According to industry estimates, Wadmani’s great involvement, unlike his predecessors, as well as the Antitrust Authority’s investigation and publication about the ultra-Orthodox website operated by Shufersal at the same time, led to frictions between the two – which accelerated Aberkhan’s retirement announcement.
And Damani and Bloch recognized the IEC: While Bloch served as CEO of the company, Damani joined it in 2019 as an independent director. A more relaxed relationship than Wadmani’s with the current CEO.
The explosive period
The Competition Authority is currently conducting investigations against Shufersal and other food retailers, a situation that Bloch needs to prepare for. At the heart of the investigation is a suspicion against Shufersal and Strauss for coordinating prices in violation of competition law, following publications in the media and financial statements.
The outgoing Shufersal CEO, along with a number of other senior executives in the industry, including Rami Levy, Eyal Ravid (Victory), Aryeh Boim (Osher Ad) and Noam Weiman (Diplomat), have been summoned for questioning. For other company executives summoned for questioning several months ago.
Another challenge for Bloch is the public protest that has arisen in recent weeks, following the announcement by some food chains of their intention to upload products. While some companies have backtracked, announcing the abolition of price increases, and others have postponed price increases until after Passover, Bloch will have to be vigilant and attentive to consumers. This is done while dealing with the government and dealing with heavy increases in the prices of raw materials, fuel, electricity, property taxes and transportation costs.
And what do the market think of the move? According to Shira Ahiez, a retail analyst at IBI Ltd., “Management changes are negative news, as they may interfere to some extent with the day-to-day running of the business, which should be focused on strengthening the many and relatively new growth engines.
“Another significant challenge lies in dealing with the public discourse, when we estimate that Shufersal is at the beginning of a very ‘explosive’ period in every issue of cost of living, and the management of the leading food chain in Israel on this sensitive issue can have critical consequences. And the cloud of inquiry into price coordination in the sector will continue to hover until the picture becomes clear, all along with our expectation of increased competition in city centers in the coming year.
“It is too early to judge whether Bloch’s appointment is good or bad for Shufersal, but it undermines its status as an island of stability in the sector. Looking ahead, this year we see a decline in retail results, especially in light of comparative data supported in part by the Corona epidemic. To offset part of the decline. “
Kilstein’s surprise
Ofer Bloch’s appointment took place relatively quickly, and surprised quite a few people – including Uri Kilstein, who is considered by many to be the leading candidate to succeed Aberkhan. Kilstein served as Deputy CEO and VP of Trade and Marketing at Shufersal for about eight years. In October 2020, he announced his departure, in favor of the CEO’s throne at Azrieli Malls.
Kilstein was marked at the time as someone who might take over the reins of Shufersal’s management, on the day the company’s CEO position becomes vacant. The group, to receive clarifications from him against the background of Globes’ revelation that he is a candidate to replace Aberkhan with Shufersal. Kilstein refused to promise not to run for office.
In recent days, rumors have been circulating about Kilstein’s return to Shufersal, under Bloch’s management, but Globes has learned that prior to Bloch’s election, quite a few company officials have announced that if he returns, they will leave.