The supermarket giant Carrefour is coming to Israel.

What will this do to our pocket?

Following the news of the imminent launch of the Carrefour chain in Israel, the question arises whether the French will benefit from the high cost of living in Israel?

Eyal Ravid, Victory, who was Carrefour's previous target for negotiations to enter Israel, 6 years ago thinks not.

A little about the network and the shocks that have already managed to cause them in the industry

Dr. Hezi Gur Mizrahi

06/03/2022

Sunday, 06 March 2022, 11:49 Updated: 12:07

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After 6 years in which Carrefour tried to launch its brand in Israel, through a collaboration with an established retail skeleton, it was announced today that it has signed an agreement to launch the brand in Israel, with Electra-Consumer, which will convert branches of Bitan and Mega wine chains -14,000 supermarket stores worldwide.

In the food retail industry, a number of assessments were heard today regarding the process that the retail giant will seek to maintain in Israel.

Industry sources also linked the resignation of Shufersal CEO Itzik Aberkhan to the new chain's entry into Israel. In the large retail chains, it may be related to Electra's designs (owned by brothers Michael and Daniel Zalkind and managed by Zvika Schwimmer) to become a leading player in the food retail industry in Israel.

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Carrefour.

Soon in Israel.

Is this consumer news? (Photo: PR)

Not suitable for the Israeli market?

As mentioned, this is not Carrefour's first attempt to infiltrate Israel.

In 2016, the management of the retail food chain from France held advanced negotiations with

, in order to produce the model for the launch in Israel, which was to include an attempt to acquire a mega chain, before selling it to Bitan Wines. Owned by Nahum Bitan.

We asked Ravid why he did not think at the time that the partnership was good for the Victory chain (it has about 60 branches and shows a nice increase in several significant categories) and especially - whether the new launch will be good with the food retail in Israel.

According to Ravid, Carrefour does have over 35 different partnerships around the world and has almost 14,000 branches, but in his opinion the proposed business model does not meet the needs of the local market, as the chain does not have a global price list - and commercial and business negotiations are independent of each country Ravid also believes that network management in the franchise model is not a productive process, certainly in the management of an existing company.

Therefore, in his opinion, this is not a move that will dramatically change the rules of the game in Israel. According to

Ravid

, the sales and management fee for the brand owner is high and will not help the chain compete with the competition for prices.

Eyal Ravid, controlling shareholder and CEO of Victory. Negotiated with Carrefour about six years ago (Photo: Omar Wieder)

ZLSH or Starbucks?

The Israeli market has experienced quite a few international branded thrills that have penetrated Israel to great acclaim, but have failed to take root in the local consumer culture.

We have seen this in international food brands that show control and growth in dozens of countries, but have not been able to sustain themselves in Israel.

For example the Starbucks and Coffee Bean coffee chains, the Subway sandwich chain, even the Pizza Hut chain and Burger King exchanged representations and partners until they began to establish their status and are still very far in market share as can be found in most countries of the world.

.

Starbucks, one of the proofs that not everything that succeeds in the world will necessarily succeed in Israel as well (Photo: ShutterStock)

The Carrefour food chain was founded in 1959 in France through a connection between Marcel Fournier, a store owner, and the Edin Defri family, who own a wholesale food marketing company (l'Ain), who began developing large retail stores from traditional grocery stores and entered the giant self-service stores market. Through mergers and acquisitions.

Carrefour has always been a swallow for innovation and consumer technology, already in the early 1980s it launched a customer club and in 2000 launched its online sales site.

The company's sales turnover stands at about 73 billion euros with a market value of 13.76 billion euros.

The company showed an increase of more than 3% in sales turnover in 2021 compared to 2020. Most of the increase came mainly from the company's online sales.

The company has plans to open another 2,994 stores in 2022, so if all goes well with Israel joining the chain's international fabric, it's a drop in the ocean.

Carrefour shop.

Soon in Israel - will the prices be the same as in Europe, or will it be heard again that "it is impossible to compare"? (Photo: PR)

Price comparison and million dollar question

We tested some products from the international brands in Carrefour France and compared them to Israel:

costs in Israel the average price of NIS 26.90 in France in the Carrefour chain.

delicacy

is sold in Israel at an average price of NIS 3.90 per unit. Sold in Carrefour, France at a price of NIS 1.6 per unit

.

) Made by Jim at sea 700 ml, sold with us on average at a price of 80 shekels and in France 49 shekels.

And these are just four examples from a long list of products, where price differences are not only in a few percent but sometimes also in hundreds of percent (and the comparison here is to France, it should be noted that prices in Carrefour Eastern Europe are even cheaper).

So will the chain really change the price level and competition in the local market, or will we soon hear again why it is not possible to compare prices between Europe and Israel ...?

• Of money

• consumption

Tags

• Carrefour

• Bitan Wines

• victory

• Eyal Ravid

• Electra