Network Yohannoff Concludes a successful third quarter with sales of NIS 983 million, which reflects an increase of about 15% compared to the third quarter in 2020. The growth is attributed to the cheap stock chain activity (of which Yochananoff holds 50.1% as of the second quarter of the year) and the opening of new branches. The net profit for the period amounted to NIS 31 million, ie about 3.4% of turnover.
In the first three quarters of 2021, Yohananoff had a sales turnover of NIS 2.748 billion, a growth of approximately 14.3% compared to the corresponding period last year. Profit for the period was 6% of turnover, and it accumulated to NIS 158 million, a jump of 118%.
The company, which is controlled by the Yohannoff family, notes that the relatively high profitability is due, among other things, to a lean headquarters and operational efficiency and to a preference for owned branches alongside control of the value chain. The chain is spread over 35 branches, with a total area of 81,000 square meters. Most of the branches are large branches, and a minority are urban (with an area of about 800 square meters). The company employs about 3,000 permanent workers, and another 340 contractor workers.
During 2021, seven branches were opened, and another nine are in the process of being established. On the one hand, the new branches helped increase sales, and on the other hand, the chain reports a 4.5% decrease in sales in identical stores compared to the quarter last year.
Last month, Yohannoff launched a private label for toiletries and food products, with the intention of expanding the brand into more categories. The company reports that the private label accounted for 20% of sales. This is a significant share that has accumulated in a fairly short period of time, since in the field of cleaning products consumers are less connected to leading brands (as opposed to food), and are therefore willing to experiment with products that will give them good value for money.
Yochananoff has control of the Zol Stock chain, which has 67 branches, to which 10 more will join. It has invested NIS 45 million in half of the shares in the chain, which sells discount products for the home.
At the same time, Yohannoff reports on A2Z, in which it holds about 6%, after an investment of C $ 2.6 million (in full dilution, this is a share of about 10%). The chain has an option to increase its holdings, in case the company goes out to raise capital. The company offers smart carts the option to buy without going through the checkout at the end, while providing information to the consumer during the purchase including issuing relevant coupons. The company estimates that the deployment of the carts in stores will take place by the end of the year, and will be completed by the first quarter of 2022 – in practice, smart carts will be offered alongside the regular carts.
Yohannoff also invested in the Israeli start-up Algortail, which is developing a full management system – an investment of $ 5 million for 20% of the company.
It should be noted that the chain is different in the retail landscape, since it does not operate an online sales system similar to competitors, but rather as part of self-collection from the branches. This is while its competitors are increasing their share of online sales quarterly. Another difference concerns the chain’s customer club, which does not operate using a credit card or the model known in the other chains. Registration is done through an app, where self-collection orders are also placed. The company does not report the number of club members.