Is the retail industry slowing down? Victory earnings fell in last quarter by 75%

The profits of the Victory retail chain fell by 75% in the first quarter of 2022 compared to the corresponding period for a total of NIS 3.9 million.

 SHOPPERS STOCKING up at a Jerusalem supermarket before the Passover holiday. (photo credit: HADAS PARUSH/FLASH90)
SHOPPERS STOCKING up at a Jerusalem supermarket before the Passover holiday.
(photo credit: HADAS PARUSH/FLASH90)

Is the food retail industry facing a slowdown?

The profits of the Victory retail chain fell by 75% in the first quarter compared to the corresponding period and total NIS 3.9 million.

The chain, owned and managed by Eyal Ravid, showed a 9.2% decrease in sales to NIS 539 million.

Why did sales drop?

The decrease in profits is explained by costs of NIS 4 million for an advertising campaign, less revenue due to Passover which was in the previous quarter, and a decrease in sales.

A man walks past a fruit and vegetable stall in a market in Jerusalem (credit: REUTERS/AMIR COHEN)A man walks past a fruit and vegetable stall in a market in Jerusalem (credit: REUTERS/AMIR COHEN)

At the beginning of April, a branch was opened in Ness Ziona, and in the second half of May two branches of the Victory City sub-chain were opened in Tel Aviv. The company has signed agreements to open eight more branches this year and next in its regular format.

Agreements have been signed to open five more branches of the Victory City sub-chain; most will open in the second quarter, and the rest in the second half of 2022. The opening of the sub-chain branches is expected to lead to a higher gross margin, as their share of sales in the network increases.

How is Victory making a comeback?

Victory has launched a new delivery service through the Wolt app.

The service already offers delivery within 30 minutes to residents of the Tel Aviv, Petah Tikva, Ono and Sharon valleys, and will later be expanded to other branches throughout the country.

The revenue forecast for the next two years is NIS 200 million. Also, the company launched a new and improved website at the end of March 2022 which is expected to contribute to a significant increase in online sales later this year. The company forecasts that from the second quarter of 2022 it will return to growth and profitability.