2024-03-20 16:26:00
SPAR (photo by Efrati Communications) After a year and a half of news and waiting, during which most of the consumer public was first exposed to the brand of the Dutch food chain SPAR, an invitation arrived to open the first flagship branch in Israel. The branch was inaugurated on Tuesday, March 19, 2024, in the industrial area of Kfar Saba, a move that marks the chain’s official entry into the Israeli market. Launching an international brand in Israel is not a simple task, and it requires extensive research before and after the launch in order to understand the true potential and adapt the services to the target audience. The Israeli public differs in consumption and thinking habits from the European one, and even immigrants from Europe quickly change their consumption patterns and acclimatize to the local culture. Despite the enthusiasm of global brands on social networks, many of them failed in the local market because the Israeli public prefers different needs on a daily basis.
The success of international brands in Israel is not guaranteed in the long term, and even the owners of international brands are not always excited by the small, local market. There are brands like McDonald’s, Ikea and Zara that managed to face the challenges and show stability and success, but others like Domino’s and Pizza Hut took years to achieve stability. Burger King, for example, tried to return to the Israeli market through the purchase of a franchise by the Delek company, while planning an expansion and adjustment strategy.
The launch of the international food chain Carrefour in Israel, in collaboration with the Electra consumer products company, brought high expectations for a change in the local market. With the purchase of Beitan and Mega wine branches, the process of converting the branches to the international brand began, but has not yet been completed. The upgrading and renovation of existing branches, most of which were neglected, resulted in significant growth, but the great news that many expected has not yet arrived.
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The struggle with the cost of living and the expectations for a significant change in the market did not materialize as we expected, the shopping experience was improved compared to the previous brand, but the significant innovation and solutions were not presented. The products marketed under the private label, which can have a critical impact on household expenses, are almost non-existent in the chain’s range.
The Israeli consumer, who is not excited by a wide variety of spices or cheap pasta that has jumped in price from ninety to three and a half shekels per weight, is looking for innovation and competitive prices that have not been found. Private brands often proved to be in higher demand than unknown brands, but even this was not enough to bring about a significant change in the existing situation. In the end, the Carrefour chain found itself with shelves full of well-known brands of local companies, but without success in bringing a solution or an actual line to consumers, which highlights the many challenges in launching an international brand in Israel.
SPAR’s flagship store in Israel, which opened in an industrial area full of leading food retail brands, places itself at the center of fierce competition. The competition ranges between prices, customer service and technological innovation, when the branch itself was opened in a place that was previously operated by Shufersal under the “Yesh Chesed” brand. The transition between stores in this area can be easily done on foot, which sharpens the competition.
In this area, where you can find branches of the City Market, Carrefour Hyper, Usher Ad, Rami Levy, Shufersal Deal and Yohannoff, all of which offer advanced shopping experiences and competitive prices, the new brand is required to present a clear added value to attract customers. Does it offer better prices, unprecedented variety, unique service, technological innovation, time savings, wide availability or fast delivery? All these are factors that can differentiate SPAR from the competition.
The Israeli market already contains marketing chains with a wide variety of products, improved shopping experiences and competitive prices. Rami Levy emphasizes the low price, Shufersal offers wide availability and innovation, and Yohannoff tries to combine price with an enhanced shopping experience. SPAR’s challenge is to present added value that will convince the Israeli consumer to choose it instead of competitors. The main question is what innovation and added value SPAR can offer that will convince consumers to switch to it, especially when the market already includes a wide variety of options. Will it be a competition in the number of branches, or do they have another plan to differentiate themselves in the competitive Israeli market?
The launch of the SPAR flagship store in Kfar Saba, without price “gimmicks” for the opening days, indicates a very different approach than what we are used to seeing in the Israeli market. While the ultra-Orthodox chain “Shefa Berkat Hashem” opened a branch in Jerusalem with unusual promotions, such as wings and chicken liver, Coca Cola, Fativar and cups for one shekel, it seems that SPAR has chosen an approach that focuses less on “gimmicks” and more on presenting other added value, such as quality, variety and service . This can be an ongoing strategy aimed at building a loyal customer base and not just attracting a one-time audience following low prices.
Focus on quality and service: instead of focusing on temporarily low prices, SPAR may be trying to present itself as a high-quality and advanced option, offering a better shopping experience and more similar to the Shufersal chain rather than Rami Levy.
Identification with the new value: SPAR’s challenge is to prove to consumers that the new value it brings to the market – quality, variety, technology, service – is significant and relevant for them, so much so that they will choose it even without the promise of low short-term prices.
Building a loyal customer base: the strategy can be successful if SPAR succeeds in building a loyal customer base that appreciates the values it offers and not just the lowest price, and what is important is that it finds the differentiation and adaptation to the market requirements, Israel is known for its enthusiasm for international brands but it turns out that the enthusiasm is temporary and it prefers the enthusiasm overseas and not near home, the super brands such as Gap, Banana Rivlik, Benton, Starbucks, Duncan Donuts, Coffee Bean, Subway, Kika and more are loved by the Israeli public abroad but did not survive here, maybe the timing was not right or maybe not really Adapt themselves to the local public.
The competitive position of the SPAR store in Kfar Saba, with prices that are not the cheapest in the market but not the most expensive either, indicates a differentiated strategy. The store focuses on presenting itself as a high-service chain with a rich shopping experience and average prices, which positions it as an alternative to Shufersal Deal and not as direct competition to Rami Levy or Yohananoff. Considering the variety of products, the prices in the store are higher than competitors such as Rami Levy, Osher Ad, Yohannoff and Carrefour, and in order to be able to present significant feasibility, it will have to consider the value of the price to the consumer, visiting a supermarket is not a substitute for a coffee shop or a bowling alley. The public comes to shop, save and enjoy the atmosphere. All additions will improve the shopping experience but not the purpose for which he left the house, the main thing is the message to the consumer to whom it is addressed and what it renews for us that we did not see and knew before and why it is worth for us to cross the road and not because of the price.
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