Unilever products are due to return to the shelves of Super-Sol supermarkets in the next few days after the two sides agreed to end a two-month dispute over commercial terms.
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Neither side would provide details, but both declared victory. Unilever said the supermarket chain had agreed to pay millions of shekels owed to the consumer-goods maker.
“We are happy to be resuming cooperation with Super-Sol. Our brands are in every home in Israel and it’s important to us that consumers have complete access to them at every chain,” Unilever Israel CEO Anat Gavrieli said in a statement.
Super-Sol officially declined to comment, but executives told other suppliers that the Israeli unit of the Anglo-Dutch giant had agreed to Super-Sol’s terms.
An industry source said both sides were right — that Super-Sol agreed to pay much of what Unilever had demanded, but that Unilever agreed to improve the terms at which it sells at the retailer. He added that part of those “repayments” would be made by selling Unilever products at sale prices.
Super-Sol, Israel’s biggest food retailer, touched off the battle last month after it sought to improve the terms Unilever gave it in a bid to compete on price with discount supermarkets like Rami Levy while preserving profit margins.
In response, Unilever cut off deliveries. Super-Sol retaliated by urging customers to buy competing products.
Unilever fired back by offering discounts of between 15% and 25% to shoppers who bought its products at competing supermarkets. The discounts came in the form of clip-out coupons, so the savings went directly to consumers, not the chains.
Super-Sol was the stronger of the two sides in the dispute, accounting for a fifth of Unilever’s sales. Itzik Abercohen, Super-Sol’s CEO, insisted this month that the chain hadn’t been hurt by the absence of Unilever products, which include the popular children’s breakfast cereal Kariot, Klik chocolates, Dove soaps, Lipton tea and Knorr instant soups.
Still, it was clear that Super-Sol couldn’t deprive shoppers of so many popular products for long, especially when it was losing customers to discounters.
Moreover, figures obtained by TheMarker show that Unilever didn’t suffer that big a sales drop because of the Super-Sol boycott, apparently because of the discounts it encouraged competing chains to offer. In August, Unilever sales were down 4.5% from a year ago and its market share dropped by just 0.1 percentage point to 2.7%, according to data from market research company Nielsen.
The dispute, however, points to the growing friction between supermarket chains and the manufacturers and importers that supply them as Israelis cut back on food spending. Unusual was Super-Sol’s decision to make the fight public by posting signs in its stores urging shoppers to buy competing products.