The Bottom Line / Just in time for Passover
This week, the biggest retail grocery chain of them all, Supersol, launched its discount chain Supersol Deal. Archrival Blue Square has an answer. It is converting regular supermarkets into branches of its own discount chain, Shefa Shuk.
Two or three years ago, the discounted price became the number one draw in the fierce competition for the heart and pocket of the customer. Recently however, it seems that a dramatic change in the public's consumption habits and the success of the private retail chains considered cheaper has trickled up to the management of the major grocers and left them with two options: Create discount formats on a nationwide scale or continue to lose customer base.
This week, the biggest retail grocery chain of them all, Supersol, launched its discount chain Supersol Deal. Archrival Blue Square has an answer. It is converting regular supermarkets into branches of its own discount chain, Shefa Shuk. Even though that chain sells glatt kosher foodstuffs it broke out of the ultra-Orthodox population centers a long time ago and Blue Square is positioning it as its urban discounter.
The third largest supermarket chain, Clubmarket, is converting branches to its "Savings Empire" chain and strengthening its other discounter, "Zol Po" ("Cheap Here"), also originally directed to the ultra-Orthodox community but now situated in secular locations as well.
The "Tiv Taam" chain may have proven that the Israeli consumer has grown up and now seeks convenience and a "shopping experience," but now the major foodstuffs retailers are addressing the issue of price. They are leaving the shopping experience for presentations at press conferences and for television commercials. In practice, they are focusing on low prices. The retail chains and private supermarkets that want to lure customers and maintain sales volume will have to keep eroding prices.
We were recently threatened with huge headlines about price hikes, but it appears that increase was nothing but fantasy. Whether the strategy is regular low prices - Supersol explained at the Supersol Deal launch that the new chain would offer "every day low prices" - or whether it is deep discounts that change from week to week - the norm at the rival discounters - the Israeli consumer still cares about the price of a kilo of chicken or a kilo of cucumbers.
The retailers' price war will allow us all to enjoy particularly attractive prices as Passover approaches. Go shopping. Supermarket shelves have Taster's Choice instant coffee for NIS 29.99 and a 68-pack of Pampers for NIS 62.99. The declarations of rising prices are wrapping fish, the fate of yesterday's newspaper.
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