The Super-Sol retail chain is taking extreme measures to improve its profit margins, which have taken a hit because of the social-justice protests that forced retailers to lower prices. Suppliers claim the chain has threatened to yank their products from its shelves if they don't sharply lower their prices, they claim.
The threats are reported by both food and non-food suppliers. The latter include hygiene and cleaning product makers.
The chain has been accused of strong-arm tactics before, specifically of refusing to stock suppliers that refused to give it better terms than given to rival chains. The case is ongoing.
Super-Sol has the clout to make the threat, if executed, hurt. It is the biggest chain in Israel, with Mega in second place. But both the giants have been losing ground to private chains, notably the heavy discount ones such as Rami Levi Shivuk Hashikma.
The main aim of the Super-Sol chain, which is controlled by the IDB group, is to offer the lowest prices in the land at its heavy-discount branches - even lower than Rami Levi, say the suppliers. Rami Levi exploded onto the retail scene in 2009 with a breakthrough offer of chicken for a shekel a kilo. At the time the birds were selling for about NIS 20 per kilo. Since then his chain has usually come out cheapest in TheMarker tests of baskets of products.
"Super-Sol told us that it was taking our products out of displays since it didn't pay to keep them on its shelves," said a medium-sized supplier. "But our products sell very well. Over the phone they told us that if we don't give them more discounts, they'll yank us from the chain. They have done price surveys and want to be cheapest, cheaper than the private chains, while increasing their profits."
Another medium-sized supplier attested that threats were issued during a meeting: "There was a lot of shouting," he said.
A big supplier said that Super-Sol "said it had to be cheaper than Rami Levi and that customers are jumping ship en masse to the private chains."
Super-Sol said it would not comment on commercial matters.
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