When Supermarkets Discovered the Miracle of Hanukkah

Israelis spend NIS 200 each on tickets to major Hanukkah extravaganzas and everyone wants to get in on the action.

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Rami Levy, the owner of the discount supermarket chain bearing his name, decided that the time had come to try his hand at mounting a stage performance for Hanukkah. He saw the marketing potential in the Israeli tradition of Hanukkah extravaganzas, which draw masses of children and their parents during the holiday vacation.

Called “Fantazia” (“Fantasy”) and starring Rinat Gabay, Tuvia Tzafir and Miri Bohadana, Levy outsourced production to Hasida Productions and is selling tickets for a mere NIS 19.90 each. He isn’t requiring that his supermarket customers make a minimum grocery purchase to buy the tickets at that price, as most food retailers do. Tickets are available by phone or over the Internet.

Levy is not the first to discover the promotional miracle of Hanukkah. He was preceded by the country’s largest supermarket chain, Super-Sol, which for the second year running has teamed up with 8MM Productions to offer discounted tickets to “Aladdin and Yasmin,” with Eli Yatzpan, Harel Skaat and Shiri Maimon, and “Snow White and the Hunter,” starring Yael Bar-Zohar, Guy Zoaretz, Hana Laszlo and Tal Mosseri. Another supermarket chain, Hatzi Hinam, joined the fray in cooperation with the producers of the Festigal Hanukkah shows, selling discounted tickets to “A Sweetheart of a Festival," which stars Moshe and Orna Datz and Michal Yannai.

But Rami Levy took the venture one step further by fully financing his production and selling tickets at a particularly low price — and not without good reason. The Israeli Hanukkah show industry generates revenues of about NIS 200 million a year. And a Dun & Bradstreet survey showed ticket sales increasing in recent years.

Other than Levy, whose daughter came up with his approach, the general arrangement is that the food retailers buy up about a third of a producer’s tickets at a reduced price. Industry sources say, however, that the price the retailers pay is actually higher than what they sell the tickets for to members of the public, but since the retailers other than Levy generally require that customers make a minimum supermarket purchase, they benefit by attracting new customers and encouraging existing customers to boost their spending.

At Super-Sol, for example, customers who buy NIS 100 worth of groceries are entitled to buy a ticket for NIS 45. At Hatzi Hinam, a NIS 200 grocery purchase entitles the customer to buy two tickets at NIS 59 each. The promotion is also a way for supermarket chains to position themselves in a positive light at a time when, since the cost-of-living protests of 2011, food retailers have been a target of the public’s wrath. Instead of being the bad guys who raise their prices, this time they can present themselves as the Hanukkah season’s version of Robin Hood, lending a hand to families as they shell out major sums on the holiday shows.

A win-win deal for almost everyone

The production companies benefit from the assurance that a major block of seats for their performances has been presold and the fact that the supermarket retailer has teamed up with the production company in promoting the shows. Super-Sol, for example, purchased about 40,000 of 8MM Productions’ stock of 120,000 tickets. The supermarket retailers acknowledge investing millions of shekels in the venture. Super-Sol alone invested NIS 3 million in the purchase of tickets and a promotional campaign that was shot at its retail locations and featured the stars from their shows. Rami Levy says he invested NIS 6 million in the Hanukkah show venture, including amounts paid the Hasida production company, which is owned by Doron Mor, whose wife, Rinat Gabay, stars in the its show. Israel Credit Cards Ltd., better known as CAL, which is also involved in the venture, funded advertising and promotion as well.

The supermarket retailers also get various concessions from wholesale suppliers for the products on the supermarket shelves, including advertising and discounts on the list price for products. Industry sources say the advertising and promotional discount that the retailers get constitutes 1% to 2% of the suppliers’ sales. In the run-up to Rosh Hashanah and Passover, the retailers also demand specific holiday discounts from the suppliers. So when it comes to Super-Sol and Hatzi Hinam, the Hanukkah show ticket sales are part of this broader picture.

“The chains buy the tickets, but they get a portion back from the customer and a portion back from the supplier,” a senior industry executive explained. “The suppliers pay a relative portion because they operate on the assumption that it attracts people to the store. Ultimately, it doesn’t cost the chain so much. This is the third year that the fourth quarter of the year is one of very weak sales, and we need to focus on Hanukkah to stir up the market.”

“It’s a supermarket chain advertising gimmick and nothing more,” says a senior executive at one major chain that does not engage in Hanukkah show promotions. “Sales volume now is at its lowest and people are looking for any means possible to attract customers. Even if a chain spends NIS 2 million on tickets, the suppliers have covered a million of that and another half million comes from customers who have come to do their shopping at a particular store to get the tickets. It doesn’t matter to the retailer whether it spends half a million shekels on a regular campaign or on a show.”

“Every chain has a marketing budget and everyone takes their marketing budgets from the suppliers. On the other hand, I could have taken the money and put it in my pocket,” counters Rami Levy. “It doesn’t matter where it comes from because it comes out of our profits. Every company has a marketing and advertising budget, and we prefer to give this budget directly to the customer.” It should be remembered, Levy says, that his chain doesn’t require minimum grocery purchase to get show tickets very inexpensively, and on their way out of his show, the members of the audience get a case worth NIS 50 to NIS 100 with candy inside, along with a toothbrush, a drink and other items. And in addition, he notes, he has made sure to bring the show to outlying areas of the country.

An initiative by Rami Levy's daughter

“I started the idea as a mother of three small children,” said Levy’s daughter, Yifat Levy Atias. “I saw that the children in kindergarten whose parents did not have a connection with an organization or group that provides discounts for ticket purchases had a problem since have to pay NIS 150 to NIS 170 per ticket. We decided to bring shows at low cost all over the country.” She noted, for example, a show that just took place in the Eshkol Regional Council area near the Gaza Strip. All of the 80,000 tickets for the performances of “Fantasia” sold out around the country within three days, she said, and 20,000 tickets for additional performances that were added to the schedule sold out within a day.

Dun and Bradstreet’s assessment is that about 90% of the tickets for the country’s Hanukkah shows are bought in bulk by labor union workers’ committees, professional associations, credit card companies, and more recently also by supermarket retailers. Only about 10% of the seats to the performances, it says, are bought by individual customers at full price, which can amount to two to three times the discounted price.

Even if most seats are sold at reduced prices, the venture is very profitable for the major production companies. They are left with sizeable profits even after paying large sums to leading cast members, who get on average about NIS 250,000 for their entire involvement, but in the case of the top stars, the figure can be as high as NIS 500,000. That’s what sources think Yael Bar-Zohar and Guy Zoaretz each get for their Hanukkah performances. The production companies also provide generous amenities to the stars, including massages and other spa treatments, entertainment for their children and food and drink.

Yet even after expenses, the production companies can be left with millions in profits, one senior production company source said. “Profits from successful Hanukkah productions come to several million shekels, but you have to remember that they work on the production for half a year,” the source noted. “In February, we are already starting to think about what we will be doing for the following Hanukkah and in April, we already do the casting.

Maor Maimon, 28, of 8MM Productions has been involved in Hanukkah shows for seven years. This year he is producing the two major shows sponsored by Super-Sol, “Aladdin and Yasimin” and “Snow White and the Hunter.” He acknowledges that the shows generate a hefty profit. “Each of our productions costs about NIS 3 million, but after one Hanukkah, you can live quite well for several years and at the same time get involved in new projects.” He said the company breaks even with the sale of half of the tickets, meaning that everything beyond that is profit.

Festigal is the best known and the highest-budget of the Hanukkah shows. This year Festigal is staging 106 performances of “X Festigal” as well as 58 performances of the production geared for younger children, “Motek shel festival.”

“We also do [cable] television productions for Hot VOD and are getting into a children’s movie for next summer,” said Yaron Peled of Solan Productions, which along with Yochelman-Asher Productions, puts on the Festigal shows.

No room for small production firms

On the negative side, Dun and Bradstreet says while major production companies are raking in the profits, every year roughly five small to medium-sized children’s show stage production firms close, including some that mount Hanukkah shows. And Maimon, from 8MM Productions, says success in the business requires caution and moderation and economic backing from a supermarket retailer or credit card company.

“It’s a dangerous field if you take risks and get in over your head. We started with small productions and took economic limitations into account. There are producers who have come out with grandiose productions and have failed."

Maimon acknowledges a decline in ticket sales with the entry into the field of Rami Levy and other new players. “All of the production companies have lowered prices because of the competition and the expanded number of shows, and there has been a 10% decline in sales for all of the shows all over the country,” he said, adding that Levy’s presence will result in declining ticket prices next year too. “The step that Levy took is welcome, but you cannot ignore the fact that he has changed the rules of the game. We are already thinking about what to do next year and how to deal with this.”

The decline in sales has had its effect on both the cost of full-price tickets and discounted seats. This year’s full-price ticket for “Aladdin and Yasimin” and for “Snow White and the Hunter,” for example, is NIS 149, whereas seats to last year’s Hanukkah shows produced by 8MM Production went for NIS 179 at full price. Super-Sol is selling tickets for the holiday spectacles this year for NIS 45 compared to NIS 49 last year. And tickets for Festigal’s main Hanukkah production are also less expensive this year. Full-price seats remain the same at NIS 170, but Hatzi Hinam is selling them for NIS 59 and Leumicard, the credit card company, has a promotion for two tickets for NIS 118, compared to a single-ticket price last year of NIS 70. But the producers of Festigal say they have not experienced a decline in sales compared to last year, adding that ordinarily they sell out every year.

A scene from the Hanukkah 2011 production of 'A Sweetheart of a Festival.' Credit: Tomer Appelbaum

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