Paz will invest NIS 40 million to expand its Yellow convenience store chain from 75 to 100 stores by the end of 2004.
Yellow, the country's largest convenience store chain, is responding to the more veteran Dor Alon chain's plans to expand from 60 to 105 stores by mid-2005.
Eight-five percent of Yellow's stores are 60 sq. m. kiosks based on impulse purchases, according to Paz retail and trade director Saguy Cohen. Only 3-5 stores will be 200 sq. m. minimarkets, while the remainder will be 80-100 sq. m., offering additional products like frozen meat, humous and canned foods.
"Yellow convenience stores doubled its sales volume in the first half of 2004, primarily from fast foods, groceries and cigarettes," Cohen said. Cigarette sales account for NIS 3 million per month, or 40 percent of sales volume.
Coffee sales also rose considerably as the chain changed suppliers, Cohen said. Using Lorenza coffee, Yellow cut its preparation time and now sells 100,000 cups a day. Paz is also preparing for the sale of non-prescription drugs at Yellow branches. Drugs will initially be sold only in 25 branches, because stores under 60 sq. m. are restricted from selling non-prescription drugs.
Paz invested greatly in marketing the Yellow brand in April. Between April and May, operations grew by 20 percent, Cohen said, projecting that the trend will continue in June.
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