Supermarkets continued to decline in current value terms in 2018, challenged by the competition from several other grocery retail channels. On-the-go consumption is on the rise, boosting growth of grocery channels characterised by impulse purchases – especially convenience stores and forecourt retailers.
Consumers who seek the convenience of shopping closer to home are also more likely to shift to internet retailing, which offers the ultimate convenience of shopping from home and having the goods delivered. Supermarkets suffered more from the shift to online retailing in comparison with other grocery retail channels.
Despite the rapid decline in the sales area in 2017 and 2018, current value sales decreased at a slower rate, as companies gradually changed their outlets. Supermarkets slowly reduced their sales area, whilst still striving to maintain steady turnover.
Mega Bair, under the ownership of Yeynot Bitan since 2016, remained the leading retail brand in supermarkets in 2018. Yeynot Bitan's acquisition of Mega Bair was a significant shock for the company, as it doubled its size, and presented great difficulties for its management.
Mega Bair outlets are located in city centres, which allows the company to charge higher prices and benefit from greater profitability. In the last few years, the chain developed its website, which offers a more convenient shopping experience, and it is promoting its customer club credit card in order to increase consumer loyalty and increase its profitability.
Shufersal led grocery retailing as a whole in 2018, and also ranked second within supermarkets in value terms. As the largest player overall, it benefits from economies of scale, as well as high consumer loyalty.
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This industry report originates from Passport, our Retailing market research database.