'Tis the season for gift certificate wars
Market sources report that both consumers and government employees' workers' committees are sure to benefit from the ongoing war over gift certificates, which are traditionally distributed to employees for the New Year.
Market sources report that both consumers and government employees' workers' committees are sure to benefit from the ongoing war over gift certificates, which are traditionally distributed to employees for the New Year. The major supermarket chains that sell the certificates - rivals Clubmarket, Blue Square and Supersol - are allegedly offering discounts ranging from 16 to 25 percent.
Asked about discounting gift certificates by 25 percent, Clubmarket CEO Yakov Ginsburg, responded, "The chain did not give a discount any larger than its competitors. We are competing in the field of gift certificate discounts just as we do in supermarket prices. We do not intend to compromise on one or the other," he added.
Clubmarket is also offering gift certificates to private customers. In a joint deal with Visa CAL, customers will be able to purchase gift certificates starting at NIS 500 at a 16 percent discount. The limit is NIS 2,000 per person, and Clubmarket is offering a maximum of NIS 5 million to Visa CAL clients, according to Ginsburg.
The gift certificate market has expanded significantly in recent years because more and more employers prefer to give their workers presents of financial value rather than gift baskets, explained Blue Square VP of marketing Sandrene Montezuma. Purchasers choose gift certificates based not only on the size of the discount offered but also the number of chainstores and locations at which the certificates can be used. Competition is very tough because the supermarket chains are vying for the business of the major companies and the workers' committees.
The gift certificate market is valued at NIS 1.5 billion per year. The supermarket chains usually do not relase sales data, but industry sources estimate that Blue Square controls 40 percent of the market thanks to its long relationship with workers' committees. Supersol and Clubmarket trail with a respective 35 and 25 percent share. The market grew some 7 percent in 2003, according to estimates.