Electra Consumer Products considers ending participation in the "Basket of the Country" project at Carrefour
In an investor call following the publication of Electra Consumer Products' second-quarter reports, CEO Zvika Schwimmer said: "The 'Basket of the Country' brought new customers to the chain, but hurt revenues." The company's management is now examining whether the additional traffic generated by the promotion justifies the financial damage, or if it is better to end participation at the end of the current period.
Electra Consumer Products is considering not extending Carrefour's participation in the "Basket of the Country" project for another six months, even though the tender conditions allow it. The reason is the price the promotion is taking on the chain's results.
"The 'Basket of the Country' brought new customers to the chain, but hurt revenues," said Electra Consumer Products Chairman Zvika Schwimmer in an investor call following the publication of the reports for the second quarter of 2026.
Electra's reports illustrate the dilemma. The "Basket of the Country" project, which launched in April, did bring an increase in the number of customers at the Carrefour branches that participated in it, but at the same time caused an erosion in gross profitability. The company's management is now examining whether the additional traffic generated by the promotion justifies the financial damage, or if it is better to end participation at the end of the current period.
The project that sparked criticism
"Basket of the Country" is a move initiated by the Ministry of Economy at the beginning of the year, in which one chain was chosen to commit to a fixed and discounted price for a basket of 100 products. In return, the chain was supposed to benefit from a government advertising campaign worth about 50 million shekels.
Carrefour was the only chain that applied for the tender, and it won it. The move launched in April, initially in about 50 of the chain's branches and online, with the purchase of basket products limited to up to two units of each product.
From its inception, the project drew criticism from industry sources. Among other things, it was claimed that the fact that only one chain competed in the tender harms its competitive logic, and that a uniform basket of 100 products does not necessarily reflect a family's real shopping basket. Further criticism dealt with the fact that the discounted prices initially applied only to some of Carrefour's branches, and that the state is investing tens of millions of shekels in advertising for one private chain.
Carrefour's decision — which is currently changing its management following the end of CEO Michael Luboshitz's term and the entry of Inbal Harson into the role — probably does not come in a vacuum. Continuing the campaign is likely not expected to give it the returns it expected at the beginning of the road.
Food retail sector: decrease in revenues
In the second quarter, the revenues of Electra Consumer Products' food retail sector, where Carrefour's activity is concentrated, decreased by 2.6% to about 818 million shekels, compared to 840 million shekels in the corresponding quarter last year.
The more prominent figure is sales in identical stores, which decreased by 7.2%. Electra explains that the decrease in the quarter was due to a decrease in sales in identical stores, branches that were sold, and the timing of the Passover holiday, while the opening of new branches offset part of the damage. In the first half of the year, food sector revenues rose by 2.4% to about 1.68 billion shekels, mainly thanks to sales from new branches, while sales in identical stores decreased by 2.6%.
The profitability of the food activity improved. The sectoral profit in the quarter amounted to 44 million shekels, compared to 43 million shekels in the corresponding quarter last year, and its rate from sales rose from 5.1% to 5.4%.
Sports and leisure sector: positive results
The sports and leisure sector of the consumer giant provides positive results. The sector's revenues jumped in the second quarter by 31.7% to about 131 million shekels. Electra attributes the growth mainly to an increase in Adidas retail sales, alongside an increase in Sa'ar activity. Sales in identical stores in the sports and leisure sector rose in the quarter by 26.2%. The sector moved from a sectoral loss of 5 million shekels in the corresponding quarter to a profit of 11 million shekels in the current quarter.
Electrical products sector: mixed picture
In the electrical products activity, the picture is mixed. The electrical consumer products sector recorded revenues of 246 million shekels in the quarter, a decrease of 3.9%. Despite the decrease in sales, the sectoral profit of the electrical consumer products activity rose from 9 million shekels to 14 million shekels, and the profit rate from sales climbed from 3.5% to 5.5%. In electrical retail, sales in the quarter rose by 1.7% to 650 million shekels, and the sectoral profit grew from 23 million shekels to 25 million shekels.
In total, Electra Consumer Products finished the second quarter with revenues of about 1.82 billion shekels, an increase of 1.7% compared to the corresponding period. The operating profit before other income rose to 82 million shekels, and the net profit amounted to about 30 million shekels.
