Israeli supermarket operator Blue Square saw a drop in net income for the first nine months of the year as fierce competition hit sales.


For the period ended 30 September, net income dropped to NIS79.4m (US$21.1m) compared to NIS114.3m in the corresponding period of 2008.


Revenues also dropped for the nine-month period to NIS5.53bn – a 2.5% decrease on the prior year.


Supermarket same-store sales decreased by 5.5% due to the recession and increased competition and erosion of prices in hard discount chains, the supermarket operator said.


Operating income (before changes in fair value of investment property and other gains and losses) in the first nine months of 2009 amounted to NIS179.6m – compared to NIS221m a year earlier.

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Zeev Vurembrand, Blue Square’s president and CEO, said: “2009 is marked by strategic measures with long-term impact, which will shape the image and performance of the company in the coming years: the adjustment of the chains and the sub-brands through the establishment of Mega Bool chain, the entry into the private brand segment and the launch of renewed loyalty club.”


He added: “We began to see the fruits of the strategy, which was first implemented a year ago and we expect that the new actions will continue to impact the results of the company in the coming quarters”.


Third-quarter revenue dropped 0.6% to NIS1.92bn, while quarterly net income rose to NIS29.6m from NIS12m in the previous year.