Super-Sol’s Chief Bemoans the Rise of Pickier Consumers

Super-Sol, which counts some 270 stores around the country, saw its sales edged down 0.8% in the first nine months of 2012 from the same time a year before to NIS 8.7 billion.

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“The market is at a standstill. It’s stuck and in a slowdown. We’re doing everything we can to try to get people to spend money. Until now we were used to a market with growth of 4% and 5% annually,” Super-Sol CEO Itzik Abercohen told a retailers’ conference Sunday.

Abercohen described a new environment for retailers like Super-Sol, Israel’s biggest grocery chain, since the social justice protests of the summer of 20011, saying consumers are more “suspicious and critical.” They are buying more basic food products and fewer luxury items.

“Once the entire nation of Israel went to Super-Sol to buy a television set. Today they don’t. We’re encountering a consumer who gives careful thought before he makes a purchase,” Abercohen said.

Super-Sol, which counts some 270 stores around the country, saw its sales edged down 0.8% in the first nine months of 2012 from the same time a year before to NIS 8.7 billion. “The new Israeli national sport is comparing prices and conducting surveys,” Abercohen complained.

But he took issue with the way the price surveys are carried out. “Those conducting the investigations don’t differentiate between center-city stores and those in the suburbs, between different formats or even if the barcode between two products they are comparing are the same. It’s all done to broadcast a message: ‘It’s too expensive − cut the price.’”

Abercohen insisted that Super-Sol had responded to the 2011 protests by holding the line on price rises until last September, although surveys by TheMarker and other media have shown otherwise.

Abercohen also lashed out at regulators, particularly the Antitrust Authority, which he said was imposing severe barriers on Super-Sol and its No. 2 rival, Mega.

“We should let the customer decide where he wants to shop and who he wants to punish,” Abercohen said. Abercohen acknowledged the changing food retail market, where a host of small so-called private chains, such as Rami Levi and Victory, have taken market share from the two leading retailers, especially Mega. But he promised that Super-Sol is fight ingback.

“Our No. 2 competition has been experiencing weakness for a number of years and I hope its situation will improve,” he said. “In 2012, I understood that I can no longer ignore the private chains, which have become our principal competitors. In response, we’ve shown that we, too, can wave the banners of chicken for one shekel and tomatoes for a few agorot a kilo.”

He said the growth of the private supermarket chains had been excessive, exceeding the rate of growth both in Israel’s population and economy. “We’re in a period of instability and insanity, whose origins are a lack of forethought,” he said. “Only now is there disillusionment and the sense that they aimed too high.”

A shopper in Super-Sol takes her pick of chocolates. Credit: Ofer Vaknin
Itzik Abercohen. Credit: Ofer Vaknin

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