RETALIX BOLSTERS SOFTWARE PORTFOLIO

Michael Garry

RA'ANANA, Israel -- Retalix's acquisition of two retail software suppliers this month "gives us a platform to develop a strong ERP [enterprise resource planning] solution for Tier 1, 2, small and medium food retailers who are currently underserved," said Barry Shaked, chief executive officer of Retalix here.

On April 1, Retalix, which offers a range of applications for food retailers, including point of sale and supply chain, announced that it acquired Integrated Distribution Solutions, Omaha, Neb., and TCI Solutions, Irvine, Calif. Retalix, with North American headquarters in Dallas, paid $44.4 million for IDS and $34.4 million for TCI. Following the acquisitions, Retalix created two new divisions: Supply Chain Solutions and Retail Solutions.

IDS' applications support warehouse management, customer relationship management, supplier relationship management, labor optimization and financial accounting. Its customers in food distribution include Bozzuto's, Associated Grocers of New England, Alex Lee and Certified Grocers Midwest. TCI's applications support headquarters and store-based pricing, merchandising and inventory management. Its customers include 30% of the top 75 supermarket chains.

Retalix's acquisitions follow closely on the heels of Oracle's acquisition of Retek last month for a reported $670 million. "The retail technology industry is in a consolidation phase," said Shaked, speaking in a conference call on April 4. "Retailers are increasingly favoring integrated solutions over point solutions, which is acting as a catalyst for consolidation as vendors of point solutions combine with large partners."

However, Greg Buzek, president of IHL Consulting Group, Franklin, Tenn., argued that what retailers continue to want is "the best point solution integrated into what they already have." Still, Buzek viewed Retalix's new integrated options as a "nice enhancement" for many of its customers.

Scott Langdoc, research director, Retail Industry, AMR Research, Boston, pointed out in a recent AMR report that unlike vendors such as SAP, Oracle and JDA, which have a cross-channel retail strategy, "Retalix has remained dedicated to grocery, drug, convenience and other FMCG [fast-moving consumer goods] retailers."