It’s 10:30 A.M. on a Sunday morning and the Max dollar store on Lishansky Street in Rishon Letzion, south of Tel Aviv. The place would normally have relatively few shoppers at this time, but the cash registers are humming as customers stream in through the front entrance. That’s what business is like when the competition from shopping malls and big stand-alone stores such as Ikea remain closed by government directive.
“In the afternoon and evening, there are a lot more people, I’d guess 500 people at a time,” said one employee.
At the end of last week, mall owners declared open rebellion against the directives keeping them closed. But after a police crackdown over the weekend, Israel’s biggest mall operator, Azrieli Group, said it would not reopen the three malls it had opened Friday in defiance of the rules.
Melisron, another major mall owner, continued to defy the rules on Sunday as did many small shopping centers. However, while the smaller centers were doing a brisk business, Melisron’s Big Mall in Petah Tikva drew few shoppers, as many police officers and city inspectors issu warnings to store owners.
Melisron – which opened two of its other malls, Hakiryon in Kfar Bialik and Grand Canyon in Be’er Sheva – nevertheless said it was satisfied with the traffic it drew.
“It didn’t go easily, but we met the goals we set. We’re glad there were no images of people storming the malls and that we could learn under calm conditions how to operate properly,” said Moshe Rosenblum, head of mall operations.
“Not many malls opened and the police were putting pressure on shoppers. In the Be’er Sheva mall there were 14 inspectors and six police officers. They went into shops, told customers it was against the law to be in there and told workers to close,” he said.
Mall owners and chain retailers said they were optimistic that the Health Ministry will support easing the rules when the cabinet meets on Monday.
But as officials were cracking down on defiant malls, the rules were largely ignored at the Max store visited by TheMarker. It is relatively large, at 2,000 square meters (21,500 square feet), but there were so many shoppers that in many parts of the store they were crowded together. Employees wore face masks but often only on their mouths, even when dealing with customers. On the checkout lines, social distancing was barely enforced.
“Don’t worry, we’re allowed to work. I have an essential-worker permit from my boss,” said one employee with a smile. “The police are handing out fines only if they come in and see someone without a mask. But we’re allowed to operate.”
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Asked how many people are allowed in the store at any one time, a guard at the entrance looked at his handheld, which showed there were currently 329.
“We’re allowed to let in 280 at a time,” he said. “I count the number coming in and someone counts them as they leave, and that’s how we calculate how may there are in the store. If you want to come when there aren’t many people, come when we open at 9 in the morning.”
Meanwhile, the number of shoppers kept growing until 11:30 A.M., when they started restricting entry. A busy line quickly formed outside.
Max is allowed to open because the owners have declared that it sells essential goods. Like supermarkets and pharmacies, at any one time, one customer per seven square meters of floor space is permitted.
As a result, Max stores have remained open since the beginning of the coronavirus crisis, while toy, furniture and sports retailers have been subjected to much more severe restrictions. They can only open on-street and strip mall locations, and are limited to no more than 10 people inside at a time.
Max stores remained open even when, for about two months, even on-street stores were closed, except for places selling essential goods.
Max’s controlling shareholder, AMI Opportunities, which is managed by private equity investor Apax Israel, is estimated to have made about 1 billion shekels ($300 million) from its investment in Max since 2017. In September, Max Stock was listed on the Tel Aviv Stock Exchange and its shares have since climbed close to 15% to a market cap of 2.04 billion shekels.
The Health Ministry doesn’t issue operating permits to businesses. Instead, businesses are required to honor the coronavirus directives, including whether to deem themselves essential businesses or not. The directives define essential stores as those selling food, eyewear, pharmaceuticals and hygiene products, home-maintenance products, and computer and cellphone stores and repair centers.
A check of the goods on sale are Max shows that only a small part of its shelf space is used to sell essential products. At the entrance, socks and slippers are on sale. Among the products on display outside are essential goods like detergent but also nonessential ones such as blankets. Large parts of the store are devoted to toys, games, children’s books just like any toy store. Other parts of the store are devoted to sports equipment and furniture, even though the global furniture chain Ikea was ordered by the Health Ministry to close after it briefly reopened.
Yaniv Gottlieb, a 37-year-old Ra’anana resident, is among the shoppers at Max. He and his wife have filled their shopping cart with blankets, a small rug, flashlights and other items.
“Malls are being treated unfairly,” he said as he looked for Hanukkah decor. “After all, we are in a closed space, a huge store that sells everything, while in malls a big space is simply divided into different stores.”
In response, the Health Ministry said in a statement: “In accordance with the directives, a place is permitted to open if its main businesses selling essential products for maintaining a home. That being the case, furniture stores are not allowed to operate under this exception.
“As to stores that sell essential products side by side with nonessentials, it is up to the enforcement authorities to decide what is the store’s principal business,” it said.
Max said in response that it was following the rules. “Our store operate in accordance with the provisions of the law and the directive of the Health Ministry, including the Purple Tag [standard] for the number of people in each store, social distancing and wearing of masks,” a spokesman said.