Shira Sapir
About a month after the MoU between Electra Consumer Products and French mega-retailer Carrefour was signed, Electra Consumer Products reported this morning (Mon.) that the franchise contract had been signed. Carrefour is officially on its way to Israel. The agreement is set for a 20 year period and automatically extends for a further 20, with the possibility of that period’s additional extension.
• The private brand and prices: 5 things to know about the Carrefour, the European food chain coming to Israel
In the agreement’s framework, more than 150 branches of Yeinot Bitan will be renovated over a gradual process to comport with the signature Carrefour style. The first Carrefour branches will open before the end of 2022. Sales of Carrefour brand products will begin before the end of summer.
It was further agreed that Yeinot Bitan would be given the opportunity to produce some of the products in Israel and market them under the Carrefour label. In addition to being a retailer, Carrefour is one on of the largest global food producers with 20,000 brands and some 14,000 products. This model allows it to sharply cut production costs. The chain’s private label accounts for 31% of its sales, considered a very high percentage relative to the Israeli market.
Over the coming months, the parties will work to set the scope of product diversity, arrange kosher requirements, determine attractive product prices, and set dates for branch openings. Gaining the franchise involves an initial payment spread across several years in addition to payments calculated as percentages of intake.
Carrefour, with some 13,900 branches and a sales turnover of €81.2 billion, is the largest global retailer yet to enter the Israeli market.
Electra Consumer Products CEO Zvika Schwimmer: “The agreement with Carrefour is anticipated to generate a revolution for consumers as well as tremendous opportunities for Israeli suppliers. This is one of the largest global food corporations and I'm extremely pleased that they’ve chosen to bring Carrefour to Israel.”
“The agreement is also a force multiplier for the Customer Club and ECP’s food division, soon be reinforced when Seven Eleven, the world leader in convenience stores, opens in Israel. Carrefour management sees its entry into Israel as an important step and is fully committed to the chain’s success. We’ll be seeing Carrefour staff coming to Israel in the very near future to guide the process of building the store’s branding in Israel.”
Amit Zev, Yeinot Bitan Group CEO: “Signing with Carrefour allows us to offer Israeli consumers a differentiated set of solutions, product range and pricing as part of their consumer experience. Our challenge now is to quickly assimilate these changes so that they're felt in every home. We’re continuing to cooperate with local agriculture and small to medium scale producers, and we’re actually opening opportunities for them to produce for the global Carrefour chain, giving them an entry card to sales in thousands of Carrefour branches worldwide.”
Carrefour: Running to over 2 billion transactions p.a.
Carrefour Group is one of the largest food retailers globally, operating some 13,900 stores in over 40 countries across Europe, the Mideast, North Africa, Eastern Asia and Africa. The company works within several retail formats: hypermarkets, supermarkets, Cash & Carry, urban stores, and online sales outlets, each adjusted to the particular country they're located in.
Carrefour sees over 2 billion transactions per annum, with a sales turnover in 2021 estimated at €.81.2 billion. As a public company, Carrefour’s shares are traded on the Euronext NV stock exchange. Its market value is some €.15 billion.
Electra Consumer Products, as part of Elco Group, is controlled by the Zelkind brothers. Over the past two years the company, led by CEO Zvika Schwimmer, has conducted several strategic moves, its current activities focusing on three primary areas. The first is as a producer and importer of electrical appliances and air conditioning systems, making it the leading retailer in the field of electricals through its Mahsanei Hashmal and Shekem Electric chains. The second area is as controlling owner in the Yeinot Bitan food chain stores, which holds the franchise to open global company Carrefour supermarkets, and the franchise to open the Seven Eleven global convenience stores chain. In March 2022 the company signed an agreement with Quick to set up a joint platform, controlled by Yeinot Bitan Group (51%), for operating online sales for consumer products and foods.
Leisure goods is the third field Electra Consumer Products entered, with its purchase of the controlling share in A.T. Saar Enterprises & Trade, holder of the Columbia franchise in Israel. This strategic move aims to create synergy with the group’s diverse areas by signing a recent agreement with CAL to establish a consumers club based on a credit card which will be fully owned by Electra Consumption.
Some months ago the global Bosch company became an Electra Consumer Products partner after acquiring 40% of Electra Industries and joining Electra in establishing the advanced Thermo-Technological Park in Ashkelon. As part of ECP’s green philosophy and strategy, the company will shortly commence work on building its air conditioner and electric appliances recycling plant in Ashkelon, the objective being to recycle 50% of all electrical waste in Israel within a decade.
Electra Consumer Products trades with a value of NIS. 1.4 billion. In the past three years its stock has yielded a 480% return for investors.