June 1, 2009

IsraelÕs Second Largest Supermarket Reeling from Recession, Orthodox Boycott

Tel Aviv…It has been almost a year that Charedim (very religious Jews) are boycotting the Shefa Shuk stores of Blue Square, Israel’s second largest supermarket chain. Ironically, Blue Square created the Shefa Shuk brand specifically targeting the Orthodox Jewish community with its large families and significant spending for groceries. But while the Charedim appreciated Shefa Shuk, they were not pleased with the actions taken by Dudi Weissman on another of his grocery chains, AM:PM, which the successful businessman decided to keep open on the Shabbat, leading to a boycott first called for by rabbis in August 2008. While both sides initially negotiated, there has been only sporadic contact since. According to Globes, Israel’s prominent business news service, the ongoing Charedi boycott and the recession is having a negative impact on the Blue Square chain. First quarter sales fell 3.1% to NIS 1.76 billion (approximately $420 million). The Alon Israel Oil Company Ltd, the parent company for Blue Square Israel published the earnings two days after Standard & Poor's Maalot downgraded the company's bonds. While the 19 Shefa Shuk stores represent only a small percentage of Blue Square’s stores, many in Israel are wondering when it will finally realize the huge buying power of the Charedi market.