Amid Coronavirus Fears, Supermarkets Rake It in as Consumers Start Hoarding

‘Sales over the past week are like the most extreme sales for a holiday,’ says Shufersal

Yoram Gabison
Yoram Gabison
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Shufersal supermarket in Bnei Brak with empty shelves following higher than usual purchasing of supermarket products, March 9, 2020
Shufersal supermarket in Bnei Brak with empty shelves following higher than usual purchasing of supermarket products, March 9, 2020Credit: Ofer Vaknin
Yoram Gabison
Yoram Gabison

Israel’s grocery store chains have experienced a pre-Passover rush in the past week thanks to the coronavirus outbreak, enabling them to buck the losing trend hitting most industries.

The stock markets have been hit hard by the coronavirus outbreak. The Tel Aviv-90 is down 15%.

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Israel’s leading food retailers may not have seen their stocks gain, but they did lose less than other shares. Shufersal lost only 9%, Rami Levy Shivuk Hashikma lost 5.6%, and Victory, Yohananof and Freshmarket lost between 2.2-5%.

The Passover season, typically an important one for the retail sector, is forecast to bring higher revenues than usual amid the crisis.

Shufersal, Israel’s largest grocery chain and the dominant player in home deliveries, stated Tuesday that it is seeking to hire another 400 employees in its online commerce division in order to help prepare deliveries for customers. This would be a 25% addition to its current workforce in that department.

As of the third quarter of last year, 15% of all purchases were online. Over the past week, that figure was 16-17%.

The last seven days have been particularly unusual for grocery chains. Shufersal said its turnover increased by up to 40%, with customers purchasing 15% more items than the average.

The chain reported particularly high sales of hand sanitizer and face masks, with increases by triple-digit percentages, and of basic household items such as toilet paper and mineral water.

The increase in demand stems from customers stockpiling in the face of a potential interruption in the supply chain. There also seems to be a growing preference for staying home instead of going out to restaurants or hotels.

Eyal David, CEO of the Victory supermarket chain, said that over the past week the chain has seen 50% more demand than usual. Its biggest sellers are canned food, toilet paper, disposable gloves, paper towels, hand santizer, cleaning detergents, bottled water, pasta, cereal and snacks.

The Passover season is likely to be particularly strong in terms of sales: The Health Ministry quarantine restrictions regarding international travel have de facto closed the country’s borders, keeping 500,000-700,000 people at home. Would-be Passover travelers generally have above-average incomes.

A man wearing a mask walks in the departures terminal in an empty Ben Gurion International airport in Lod, near Tel Aviv, Israel, March 10, 2020. Credit: RONEN ZVULUN/ REUTERS

“Sales over the past week are like the most extreme sales for a holiday,” said Shufersal. It forecasts brisk sales to continue through the first week of April, in advance of the Passover holiday, which begins April 8.

The usual Passover purchase is 15% larger than the annual average.

Shufersal noted that its sales to hotels and restaurants have not actually dropped, even though these sectors are being hit by the crisis.

Rami Levy, Israel’s second largest grocery retailer, said its sales have increased 75%-100% over the past week, leaving it struggling to meet demand for online orders. The number of delivery orders has doubled, and the percentage of deliveries out of total sales volume increased to 7.5%, up from 5%. The average order is also larger than before.

“There’s no question that coronavirus has been good for us in the short term,” the chain stated, forecasting the demand to stay strong throughout the holidays.

Once the crisis ends, and Israelis work their way through their food stashes, sales are likely to decrease slightly, but Rami Levy expects the impact of this to be limited and relatively far off.

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