Supermarket chains' competition drives prices down
'Cost365' supermarket chain announces massive price reductions on fruits and vegetables; rival chains expected to lower prices as well.
The Mashbir supermarket chain 'Cost365' decided Tuesday morning on a massive price reductions on fruits and vegetables twice a week at its branches in Afula, Kfar Saba, and Petah Tikva. 1kg bananas costs NIS 1.5 and 1kg of various vegetables cost NIS 0.5. According to the company, it's a strategic marketing move to allure more clients. Low-cost Rami Levi supermarket chain has already responded with NIS 0.4.
The reason for this surprising generosity is simple: The small and young chain has been struggling in a brutal competitive environment including Yenot Bitan, Shufersal Deal, Rami Levy etc. As fruits and vegetables are profitable and popular fields, the chain decided to take advantage of that to widen its customer base and maintain a firm foothold in the retail supermarket arena.
Some might think that due to the low prices the chain is trying to get rid of its low quality merchandise; however its CEO Nissim Hassan assured Ynet that this is the same high level of merchandise as always. "What I don't bring home to my family, I don't sell" said Hassan.
Another limitation on the appealing sale, is that they are valid only on NIS 150 purchase, however most of the buyers spend a lot more than this when shopping for groceries. The purpose of this limitation is to prevent wholesalers from 'cleaning' the merchandise on the expense of our clients.
There is no doubt that lowering the prices has awaken the competition, and the first to lower the bar further is the retail supermarket chain, Rami Levy Hashikma Marketing, which already reduced the prices of vegetables to NIS 0.4 per 1kg. "We responded quickly and as soon as we heard 'Cost365 price reduction frenzy, we started selling vegetables and various types of fruits such as strawberries in lower prices and throughout the entire week, so there is no reason for my customers to go over to the competitor". Said Yossi Sabato toYnet
Nissim Hassan told Ynet that as far as he is concerned he is committed to his clients and will respond accordingly. "If other chains continue to lower their prices our clients will benefit from the competition". Said Hassan.
