SPAR to open debut supermarket store in Israel next week
SPAR license holder Amit Zeev to launch the first store in Kfar Saba, with 10 more planned within months, out of a total of 35 branches, as Israelis grapple with price hikes
Sharon Wrobel is a tech reporter for The Times of Israel.
Dutch supermarket chain SPAR will open its first branch in Israel next week in a move that could help spur much desired competition in Israel’s overly concentrated food retail market and help bring down prices of some products for consumers.
The chain’s first Israel branch spanning across 2,500 square meters will open on March 19, in Kfar Saba, at an investment of NIS 10 million ($2.7 million). The store will sell 750 of SPAR-branded private label products, which are less expensive than many local alternatives, alongside local brands as well as goods produced for the chain by Israeli manufacturers and farmers.
SPAR license holder for Israel Amit Zeev is planning to open another 10 branches in the coming months, including in Beersheba, out of a total network of 35 stores set to be launched within the next five years. The foray into the Israeli market comes as local food companies have hiked their prices since the outbreak of the war with the Hamas terror group on October 7. Manufacturers, including Tnuva, Osem and Strauss, raised the cost of some items by as much as 25 percent in January.
Established as a cooperative in the Netherlands back in 1932, the Dutch-owned chain has more than 13,900 stores and operates in 48 countries around the world.
“After a year and a half of intensive work, which included visits to stores worldwide, meticulous selection of products tailored for our consumers at fair prices, and substantial investments in every aspect of store design and various departments, we are thrilled to celebrate the opening of this store,” said Zeev. “We believe that supporting local agriculture is essential, advocating for the inclusion of small and medium-sized producers on store shelves alongside products from the world’s largest producers.”
“The store features hundreds of locally manufactured products, introducing items not yet encountered in other supermarkets,” he announced.
The supermarket branch sports a café that sells hot dogs for NIS 5 ($1.37), pizza slices for NIS 9.90 ($2.71), and a variety of toasts for NIS 10 ($2.74) each; a nursery; a cutting station for fresh fruit; a bakery that sells European rolls for NIS 1.90 ($0.52); a refrigerated room that sells 300 different types of beer; and a kosher wine and alcohol section with over 1,000 varieties of drinks. It also features a full-length bowling lane for customers to win discounts for their next visit.
The launch comes after Israel’s largest supermarket chain Shufersal at the end of September backed out of a NIS 28 million ($7.7 million) partnership deal to set up the SPAR chain with Israeli businessman Zeev due to regulatory restrictions and changing market conditions.
Zeev is the former CEO of the Yeinot Bitan supermarket chain, which last year transformed many of its stores into stores of the French supermarket chain Carrefour. In May, Israel’s Electra Consumer Products, which bought out Yeinot Bitan, opened the first 50 Carrefour branches across Israel at an investment of NIS 250 million ($68.4 million) after signing a franchise agreement with the French retail chain.
As of the end of September, 72 branches of converted Carrefour stores were operating in Israel, according to Electra Consumer Products. Since the launch of the Carrefour branches in May to the end of September, sales turnover growth at the stores increased by 60%. During the third quarter of 2023, sales at the Carrefour converted stores increased at a rate of 47.1% compared to the stores’ revenues (under previous management) during the same period in the previous year.
SPAR label cereal products are priced at around NIS 7.90 ($2.16) a package, similar to the cost of Carrefour private label cereal, but lower than a comparable product sold at NIS 13.90 ($3.80) at Shufersal.
Food prices in Israel have risen 50% over the past two decades and are 25% to 80% above the OECD average, with dairy products, soft drinks and grain-based products particularly expensive (as of 2017 data, according to the OECD). Some sectors in the local economy suffer from overconcentration, and in the food retail sector, the top three supermarket chains account for over half of the Israeli market, limiting competition and putting upward pressure on prices.
