The fate of the Mega supermarket chain, controlled by Alon Blue Square Israel (NYSE: BSI), is still in the balance. Sources inform "Globes" that the chain's efforts to obtain longer credit from its suppliers have not succeeded, and that the large shortage of food products and other items is having a damaging effect on sales.
Last week, because of the shortage of products, the chain's sales dropped to an estimated NIS 70 million, which compares with a weekly sales target of NIS 80 million, as derived from the chain's recovery plan. The previous week too, Mega did not manage to reach the sales target, and sales totaled just NIS 73 million.
The recovery plan, it should be pointed out, deals with sales targets, but not profits. The chain clearly continues to accumulate losses, and in any event is not expected to reach breakeven this year.
Most suppliers are making only very restricted supplies to the chain, and even those that declared that they would supply it as usual are not fulfilling that declaration.
Published by Globes [online], Israel business news - www.globes-online.com - on November 16, 2015
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