Why Shufersal’s haredi discount website pushed the Israelis’ buttons

Last week’s revelation that Israel’s largest supermarket chain, Shufersal, was offering a reduced-price website for haredi shoppers struck a nerve in Israeli society. With high consumer prices among the country’s most contentious social issues, the idea that a segment of society would receive preferential treatment from one of the country’s most powerful corporations raises new questions about some of Israel’s oldest challenges.

N12’s “Tochnit Chisachon” (Savings Plan) program revealed that Yashir L’Mehadrin, a site run by Shufersal targeting the ultra-Orthodox community, was offering products cheaper than the chain’s main website. Prices for up to 2,000 identical products were found to be 10-20% cheaper at Yashir L’Mehadrin, and in some cases the difference was even greater. The price of frozen salmon went from NIS 64.90 at the main site to NIS 34.90 at the mehadrin site, and the price of a jelly donut for Hanukkah dropped from NIS 5.90 to NIS 2.90.

Shufersal responded to the outcry by pointing out that while Yashir L’Mehadrin was very quietly marketed within haredi circles, it was available for use by anyone. However, it was too late. Following the investigation, consumer organizations called for boycotts of Shufersal and filed class action lawsuits against it, alleging that the site violated anti-discrimination and consumer protection laws. By the weekend, Shufersal gave in to public pressure and suspended the site.

The scandal came at an extremely delicate time for Israel’s economy. A new national budget was approved last week for the first time in 3.5 years, with a long list of reforms that promise to lower the cost of living by making it cheaper and easier to import goods from abroad. However, skeptical shoppers doubt that the savings for importers will translate into lower prices in stores.

Meanwhile, supply chain delays and other factors related to the pandemic have led to food prices starting to rise significantly for the first time in a decade. Since a rise in cottage cheese prices turned into the 2011 social justice protests that brought hundreds of thousands of angry Israelis to the streets, supermarket chains have feared that the social cost of raising prices is not worth it. .

A WOMAN pushes children into a shopping cart in front of a Shufersal ‘Sheli’ in Ma’aleh Adumim (credit: AMMAR AWAD / REUTERS)

Shortly before the Yashir L’Mehadrin story came to light, Shufersal CEO Itzhak Aberkohen said in an interview in Hebrew that in light of global shortages, there was no way to prevent rising stocks. prices. Now that it is clear that most products can be sold significantly cheaper when needed, many Israelis feel they have been treated like friars (fools).

It could be argued that Shufersal was right to target haredi shoppers with its own grocery site. The Haredi population has been one of the hardest hit by the coronavirus pandemic and has been slow to embrace online grocery shopping. Israel already has a number of discount supermarket chains focused on ultra-Orthodox neighborhoods, including Shufersal’s own Yesh Chessed chain.

But preferential treatment for the Haredi community has been a sensitive issue for secular Israelis, and many religious, for centuries. Secular organizations began calling the higher prices at the main Shufersal site a “tax” on the secular, while some on the other side complained that taking down the discounted site was akin to “punishing” the religious and hinder the development of more haredi stores online. .

While issues such as exemptions for the general ultra-Orthodox population from serving in the IDF and participating in the workforce have been on the political agenda since the state was founded, what is interesting about the Yashir L’Mehadrin episode is that it does not reflect a political situation. fight for power, but economic.

“This example only highlights the large and rapidly growing political and market power – demographically – of the Haredim,” said Professor Dan Ben-David, president of the Shoresh Institution for Socio-Economic Research and an economist at Tel Aviv University. “It is not new, it is just increasing at an exponential rate.”

“The Israeli airline El Al used to fly on Shabbat until the 1970s,” said Ben-David. Today, not only are they closed on Shabbat, but even Arkia is now considering closing on that day as well. These companies fear the power of the haredi market more than being closed one-seventh of the time in a ruthless airline industry that has no prisoners. “

“The Shufersol problem is one of cross subsidies,” continued Ben-David. “Specifically, the chain allows the haredim to buy at substantially lower prices, while the rest of its customers pay more to cover these expenses. If the non-haredim wake up and find that they are still the majority, with that guy of market power, then (a) their prices will fall, and (b) the discounts given to the haredim will have to decrease as well. “

“With the Haredi share of the total Israeli population doubling in each subsequent generation, the Shufersol story is just a preview of things to come,” concluded Ben-David.


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