Supersol Deal Selling Dozens of Loss Leaders, Watchdog Learns

A Supersol report to the antitrust authority reveals that its discount chain Supersol Deal sells nearly 100 loss leaders - products that it sells for less than what it pays, while Blue Square sells far fewer products at a loss. These items tend to be either products for which demand is relatively inelastic (i.e. less responsive to changes in price), like disposable diapers, or those included in most shopping baskets, like coffee and Coca Cola.

The antitrust authority launched its investigation following aggressive campaigns by the major chains after the demise of Clubmarket. The authority also checked the period preceding its collapse. Authority sources say their view on loss leaders is divided, because no one disputes that consumers benefit from the phenomenon, at least in the short run. The investigation stems from the concern that loss leaders were utilized to force out a competitor from the market.

When Supersol launched Supersol Deal in March, Supersol CEO Effie Rosenhaus declared, "We wish a safe trip to whoever sells for less, because he won't last very long." Supersol did not hide its intention of fighting off the private smaller rivals that had eaten away a chunk of the major chains' market share in recent years.

Clubmarket launched its Emperia at the same time as Supersol Deal, also selling many loss leader items.

Suppliers are dissatisfied with loss leaders, claiming that it harms placing their brands and sales. Complaints in the industry noted that the major chains were selling at prices so low that private retailers prefered to buy from them rather than from suppliers.

Super Deal is now rated as having the second-largest supermarket subsidiary with a market share of over 12 percent, according to ACNielsen.