Shufersel and Amit Ze’ev signed a memorandum of understanding to establish the Dutch SPAR chain of writers in Israel with an investment of tens of millions of shekels. Shufersell will join as a shareholder a corporation controlled by Amit Zeev, which will enter into a license agreement with SPAR, which will include, among other things, the right to establish SPAR stores in Israel as well as the right to import and market products under the SPAR private label.
According to the memorandum of understanding – the intention is to open at least 10 branches in Israel in the next three years and SPAR products will be sold exclusively in Shoppersal stores in the various formats in addition to selling them in the new independent SPAR network. Amit Zeev will serve as CEO of the joint company. The agreement is subject to the approval of SPAR Global and the approval of the Competition Authority
Uri Waterman, CEO of Shufersal Group: “Shufersal is examining and promoting a number of growth engines, one of which is cooperation with an international network. Global SPAR products will be marketed at fair prices that are significantly lower than usual in Israel, thus contributing to lowering the cost of living in Israel.”
According to the memorandum of understanding, the group intends to establish a joint company with Amit Zeev, who represents the international SPAR chain based in the Netherlands, and will serve as the company’s CEO. The joint company will have the right to import over 10,000 SPAR brand products marketed in 48 countries around the world, develop a variety Local private label products under SPAR that meet the standards of the brand and it will have the right to trade the products it has developed with other SPAR partners in the world.
All this, in addition to Shufersal’s private label, which has approximately 5,900 products. Shufersal’s private label sales make up about 26.7% of total food retail sales (as of the third quarter of 2022).
Amit Zeev said: “In recent months, I have been involved in forming the group of partners who together will establish the SPAR chain in Israel. I have conducted negotiations with several retail chains in Israel and SPAR is the largest and most professional and I am happy and proud of the partnership. I am confident that together we can bring about a real change, give the customer a new shopping experience that includes the quality of products and service that we all know from Europe alongside prices that surprise every Israeli when visiting a supermarket across the continent.
SPAR is an international retail chain originating in the Netherlands that operates in 48 countries around the world. The launch of the chain in Israel will be established under a franchise agreement and the memorandum of understanding with Shufersal will allow it to open branches in Israel and purchase thousands of products of the private brand SPAR.
The chain operates in a model of local partners, in 13,623 stores worldwide serving 14.5 million customers every day, with an annual sales turnover in 2021 of approximately 41.2 billion euros. Its annual growth rate stands at an average of 5.1% and according to the forecasts of the global SPAR, the chain is expected to reach a sales turnover of 50 billion euros in 2025.
This week Shufersal reported that it acquired an additional 25% and reached 100% in the food wholesaler Amiga. Shufersal’s management is trying to find growth engines and define wholesale sales as a significant growth engine. The acquisition of control of Amiga was two years ago, when Shufersal purchased 75% of the shares for NIS 23.5 million, and established a subsidiary, Shufersal Amiga, in which founder Gili Amiga held 25% of the shares. Amiga is responsible for supplying about 60% of the food to the institutional market in the Gush Dan area and it distributes food to catering companies, restaurants, hotels, event gardens, government offices and large organizations.
Four months ago Shufersal purchased Yossi Israeli’s distribution company, which is active in the north of the country. The activity is completely synergistic to Amiga’s activity and Shufersal intends to establish an institutional arm – Shufersal Business that will concentrate all the activity. According to estimates, the scope of Shufersal Business’ activity reaches several hundred million shekels.
The new growth engine is necessary given the difficulty in the chain market – the price increases in raw materials lead the suppliers to raise the prices of the products when the chains cannot pass the price increase on to the consumer in a similar way. Profitability is consequently eroded. Shufersal against the background of the decrease in profitability and the slowdown in the economy began during a reorganization in order to save over NIS 200 million per year.
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