Chicken Fight

On Tuesday, Vivian Moyal searched angrily among a throng of customers for Rami Levy, the owner of the eponymous supermarket chain. She'd come to the opening of his new branch in Nesher after being disappointed by competitor Mega Bool, just 200 meters away.

"I bought a container of milk and one of cheese for a shekel each, and I wanted to buy more. They wouldn't let me. So I came here," she explained.

At Rami Levy, the milk and cheese were 50 percent cheaper, but quantities were limited there too.

Moyal, a single parent in her forties, earns minimum wage as a cleaner, a sum that entitles her to the supplement she receives from the National Insurance Institute.

"It's a difficult situation," she said, "I bought two chickens for 39 agorot each, milk and cheese for a half a shekel. I have to be watchful about everything: should I buy [generic] instead of Palmolive dish soap? Who cares what I wash the dishes with? Today everyone has to think hard about what they eat. People will come down here from [as far as] Metulla to shop."

It's doubtful that anyone at Tuesday's opening was from Metulla (more than 100 kilometers away), but the Nesher store, which stretches over 4,000 square meters, was filled to the brim with people. Many were pushing, crowding, and arguing about places in lines that wound their way toward all 15 checkout counters.

A relaxed and smiling Rami Levy walked among the customers, with a good reason to be in such a good mood: he started the price war, broke the going price of chickens and increased competition in a way that seems almost personal. Ever since he started lowering chicken prices, he's been a thorn in the side of the Mega Bool chain, which on Tuesday offered them at one agora a kilo, for customers spending over 150 shekels in the store.

"Where were they before I opened? Why did they sell at high prices? It doesn't matter. What's good for the consumer is good for me, and the customer loves competition," Levy said.

The economic downturn, Levy admits, has been good to him.

"I sell cheap and people come over to me," he said.

Staple foods are sold almost for nothing: a liter of milk for half a shekel, soft white cheese for the same amount, simple loaves of bread for one shekel and a kilo of tomatoes for 79 agorot. On the other hand, a package of four Elite chocolate bars costs 18 shekels in his store.

"He's smart," according to a customer named Nira, a resident of Haifa's upper-middle class Denia neighborhood.

"Most people want flour, bread and chicken, and that's what he discounts, but chocolate costs as much as it does in Denia," she said. "I shop here now because Rami Levy started from nothing. He didn't pick money off trees. He represents the new way of making money, not the old elite class. So I prefer do my NIS 1,000 shopping trips here."

The crowd was smaller at the nearby branch of Mega Bool, owned by Blue Square-Israel. Containers of milk and cheese, a shekel each, were selling along with chickens at an agora per kilo. Cooking oil cost the same as at Rami Levy, as did chocolate and bread.

"I'm not upset about the new competitor in the area," Blue Square's trade division head Gershon Wissman said. "From the moment we launched our chain, we have engraved on our banner [the goal of] becoming the cheapest and most creative store."

According to Wissman, the chain declared a few weeks ago that it would freeze prices on 3,000 products for the entire year.

"People are always curious on Sundays [about weekly specials], but the rest of the time customers discover that what we offer them is a genuine solution," he said.

But at this Mega Bool, the opening of the nearby Rami Levy branch led to a preemptive price war, which, according to Wissman, in turn led to a 40 percent increase in the number of customers in the week before Rami Levy's opening.

When Moyal finally met Levy, she hugged him instead of hurling complaints in his face. She had shopped for an hour and then, despite the low prices, left with only the two chickens and milk and cheese she'd started with. Even with Rami Levy's prices, she has to do her own careful calculations.