Investors punish Shufersal stock: Key reasons for the decline
Israel's largest supermarket chain lost 11% of its market value in two days following weak half-year reports. Despite efficiency measures implemented by owners Yossi and Shlomi Amir, the company is struggling with declining same-store sales.
Shufersal stock lost 11% in the last two trading days of last week, representing a loss of 1.3 billion shekels in market value. The company's current market value stands at 10 billion shekels. The decline followed the publication of weak results for the second quarter and the first half of 2026. Since the beginning of the year, the stock has shown a return close to zero, trending towards the negative.
The country's largest supermarket chain, controlled by brothers Yossi and Shlomi Amir, is currently undergoing a major reorganization, including the establishment of a new discount chain, "Universe".
Sales decline and operational challenges
Despite a series of cost-cutting measures that initially boosted profits, Shufersal has recorded a decline in same-store sales almost every quarter over the past year. In the second quarter, revenues fell by 7.5% to 3.4 billion shekels, and in the first half, revenues totaled 7.1 billion shekels, an erosion of 2% compared to the same period last year.
Management attributes these results to the timing of the Passover holiday, branch upgrades, the closure of loss-making locations, and the implementation of new logistics infrastructure. However, the same-store sales data, which showed an 8.5% decline in the last quarter, highlights significant challenges for the retailer.
For comparison, other public chains showed growth in this metric: Rami Levy (+3.6%), Yohananof (+6.3%), Tiv Taam (+5.2%), and Victory (+8.3%).
Strategic changes
At the heart of the process is the conversion of 30 large discount branches into the "Universe" format. Additionally, the company is phasing out the "Shufersal" private label on packaging, replacing it with "supported brands" positioned as higher quality. Sales of private label products rose from 17.8% to 20.4% of total revenue.
Shufersal continues to implement its strategy, focusing on fresh meat imports from South America and expanding its non-food product range (such as Lego).
IBI retail analyst Yuval Gur Aryeh reduced her target price for Shufersal stock by 9% to 51 shekels, which is still 33% higher than the current market price. She maintained an "outperform" recommendation, citing potential for improved profitability and high cash flow yield in the long term.
