Consumer Awareness of Clubmarket Sank Even Before Chain Buckled Under Heavy Debts

Brand recognition of troubled Clubmarket's subsidiary chains plummeted in the past eight months, according to a Haaretz survey. The public also proved to have lost interest in shopping at those stores during the period between the two surveys conducted in December 2004 and July 2005, even before the chain entered court protection.

Clubmarket's Jumbo chain suffered in particular. When asked what names came to mind when they thought of supermarket chains, 10 percent of the respondents answered Jumbo in December but only 3 percent did so this summer. Jumbo began converting stores into Emperia stores last month, but the 3 percent recognition of that chain's name hardly made up for the steep slide for Jumbo.

"Emperia, which was set up as a discount chain, has yet to reach its targets because of the short time frame," says Israel Olinik, who conducted the survey for Haaretz.

Clubmarket's problems don't stop with low brand recognition. The share of consumers who primarily shop at Jumbo slid from 5 percent to 3 percent during the survey period. Some 3 percent shop primarily at Emperia.

Zol Po on the rise

Zol Po, which targets the ultra-Orthodox population, is Clubmarket's one bright spot. Its market share climbed from 3 percent to 5 percent, though the number of consumers who consider Zol Po the cheapest chain remained steady at 6 percent.

Blue Square's Mega and Supersol's Hyper Neto led the field in gaining brand recognition. Mega, in fact, led in all parameters: brand recognition (25 percent); being the shoppers' primary store (18 percent); and perception as the cheapest supermarket (12 percent).

Blue Square's aggressive campaign of price discounts has proven itself so far. The survey also revealed an economic link playing into Mega's hands. "The higher one's income and education level, the stronger the perception was that Mega is cheap," Olinik said.

Mega's success may also be related to advertising, on which it spent $11.7 million during the first seven months of 2005. Blue Square spent $3.5 million on advertising for Super Center, whose market share grew from 2 percent to 3 percent during the same period. Mega, by contrast, focused on discounts and low prices.

Supersol's big investment in advertising helped launch its new line of Supersol Deal stores, which have captured a 3 percent market share. However, the same could not be said for Supersol itself, whose share slipped from 4 percent to 2 percent. Supersol has also decided to do away with its Hyper Neto line, which has actually strengthened in all parameters, and replace it with "Supersol Sheli" stores after Rosh Hashanah.

Supersol's campaign has put heat on rival Hezi Hinam. Even though 11 percent of the respondents consider Hezi Hinam the cheapest chain, its market share was squeezed from 7 percent to 6 percent since December. Industry sources said competition has been hard on Hezi Hinam but stress that the chain's advantages are not only price-related. The chain is maintaining customers despite its relative weakness of late, they said.