Israel’s largest retailing chain Shufersal Ltd. (TASE:SAE) has hired management consultancy company McKinsey to help it form a streamlining plan to cut operational spending and increase profitability. At this stage no decisions have been taken about the details of the plan, which is still being discussed by McKinsey and Shufersal’s management but the retail chains stresses that the plan will not involve layoffs.
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In November 2022, Shufersal implemented a streamlining plan to save hundreds of millions of shekels, which included closing Shufersal and Be pharmacy branches and un-automated distribution centers , following a year with poor results that included a fall in both revenue and profitability. The company also laid off 120 employees at its head office but this time prefers not to repeat layoffs. Instead, the retail chain is likely to reduce its workforce over time by cutting down on hiring, but no final decisions have been taken.
Israel’s retail market is relatively competitive and a rise in the prices of inputs, and the weakness of the shekel against the US dollar has made imports more expensive and changed Israeli consumer habits, with inflation pressing on the entire sector and Shufersal in particular. Some of the price increases are passed on to customers, but due to competition in the industry, companies are compelled to become more efficient.
Shufersal said, “As we have clarified in the past, Shufersal periodically examines changing logistical and other operational processes in order to improve its operational efficiency in a way that will allow it to conduct itself in a way adjusted to its needs. The streamlining being examined does not concern personnel nor does it concern steps to lay off employees.”
Published by Globes, Israel business news – en.globes.co.il – on October 5, 2023.
© Copyright of Globes Publisher Itonut (1983) Ltd., 2023.
