Rami Levi Hashikma Marketing
Encyclopedia
Rami Levi Hashikma Marketing is the third largest Israeli
retail supermarket chain, behind Shufersal
Ltd. and Alon Holding–Blue Square Ltd., with annual revenues of NIS 1.81 billion (US$53 million). Founded in 1976 on Rehov Hashikma (Sycamore
Street) in the Mahane Yehuda Market
district, Rami Levi was Israel's first discount store. The chain claims to slash the price of the average basket of goods by as much as 20%. The company went public on the Tel Aviv Stock Exchange
in 2007 and has increased its sales volume and number of stores each year since.
Rami Levi operates a chain of 21 discount supermarkets in Central and Northern Israel employing 3,000. It also distributes wholesale to 450 stores in and around Jerusalem. The company has diversified into retail clothing sales, real estate, and cellular communications.
-born mother. He grew up in poverty in a one-room tin shack with a shared kitchen and bathroom in the Nachlaot
neighborhood. Shopping with his mother in the nearby Mahane Yehuda Market (the "shuk"), Levi came to the realisation that there were price differentials available to wholesalers, who preferred selling to retailers to dealing with individuals. Upon completing his army service in 1976, he rented a 40 square metres (47.8 sq yd) stall on Hashikma Street, one of the commercial streets of the shuk, and opened a store selling goods at wholesale prices directly to individuals. He named his new company after himself and the street he was located on.
Levi said he initially bought goods from a wholesaler and sold them at cost. After three months, he bought goods directly from the importer whilst maintaing his wholesale selling prices, thus becoming the first discount store in Israel. In the early 1980s Levi opened his second, 80 square metres (95.7 sq yd) store.
In May 2007 the company, which had eight branches and a market valuation of NIS 430 million, made its initial public stock offering on the Tel Aviv Stock Exchange. Within two years, the number of branches doubled to 16. The company now plans to expand to 30 branches by 2011.
Rami Levi introduced supermarket price war
s to Israel by promoting low prices and discounts in advance of Jewish holiday
s. For example, for one week in 2008, the chain sold milk for less than the price of water, and drove headline prices of chicken down to 0.79 shekels per kilo. For Rosh Hashanah
2010, it again grabbed headlines by offering chicken, apples and honey at 1 shekel per kilo (13 cents per pound). Similar promotions were carried out for Passover
2011.
In 2009 the chain's discounting policy began to make a dent in the market share of Israel's leading supermarket chains, Shufersal Ltd. and Blue Square-Israel Ltd. Industry analysts attribute the chain's success to Levi's management strategy and marketing skills. Rami Levi Hashikma Marketing stock trades in the TA-75 and TA-100 indexes at a market cap of NIS 1.77 billion (US$52 million)(2011).
, Haifa
, Kastina, Mevasseret Zion, Modiin, Nesher
, Netanya
, Pardes Hanna, Ramat Gan, Rosh Haayin
, Tiberias and Zichron Yaakov. There are also four locations in the Judea and Samaria Area, ie., Beitar Illit, Gush Etzion
, Shaar Binyamin Industrial Park and Mishor Adumim
. Levi's stores in the West Bank
are often cited as a model of Arab-Jewish coexistence, as Arabs and Jews shop and work there side-by-side.
In 2010 the locations in Judea and Samaria, which attract thousands of Palestinian shoppers and top Palestinian Authority officials, – and which are staffed by both Arabs and Jews, were targeted by the PA's anti-Israeli goods campaign. For several months the PA attempted to discourage Arabs from shopping at Rami Levi supermarkets, culminating in an official boycott
of the chain in September 2010. At the same time, there were concerns among some Orthodox Jews in the area regarding security and especially the issue of intermixing between the male Arab shelving staff and the female Jewish cashiers. All these issues have been largely put aside by the local populations, as witnessed by the multi-ethnic crowds that fill the stores on any given afternoon.
neighborhood of Jerusalem zoned for 100 housing units. He also invested 145.5 million NIS (US$36.3 million) in land for 265 apartments in the Holyland complex. In 2008, he bought the rights to SBH Sha'ar L'Yerushalayim for 15 million NIS (US$3.95 million), making him the controlling shareholder of a company that owns land on Hebron Road
zoned for 240 housing units, a hotel, and commercial and industrial space. In 2009 he bought Delek Real Estate's share of the Jerusalem Railway Station
compound on Derech Beit Lehem for about 13 million (US$3.6 million); the site is zoned for 1000 housing units. In 2010 Levi partnered with Amikam Ben-Zvi and Housing and Construction Real Estate to buy 13 million NIS (US$3.6 million) worth of land in the Givat HaMatos
area in Jerusalem, also zoned for 1000 housing units. However, Levi blames slow progress on developing the company's recent acquisitions on bureaucratic red tape by planning authorities.
In 2011 Levi made headlines with his bid to take over the development of the Nofei Tzion luxury housing product in the East Jerusalem neighborhood of Jabel Mukaber
after developer Digal made a debt settlement with creditors. When the identity of the competing bidder – Arab-American businessman Bashar Masri
– was announced in the Israeli newspapers, nearly 77 percent of bondholders voted to negotiate with the group of Jewish investors headed by Levi.
Rami Levi Hashikma Marketing owns 65% of the land on which its supermarkets stand, including approximately 35000 square metres (41,859.7 sq yd) of land in Mevasseret Zion, Modiin, Gush Etzion, and Pardes Hanna. The company uses its own equity
– estimated at NIS 500 million (US$139 million) – for its commercial real estate purchases.
license from the Israel Ministry of Communications
. The company previously announced in a 2010 statement to the Tel Aviv Stock Exchange that upon receiving this license, it would open a new subsidiary, Rami Levi Hashikma Marketing Communications Ltd., and sell advanced mobile telephone services in its supermarkets. In February 2011 Rami Levi signed an agreement with Israeli mobile phone provider Pelephone
, allowing the supermarket chain to use Pelephone's infrastructure to provide cellular phone services.
neighborhood of Jerusalem. Levi is also a member of the Jerusalem City Council as part of Mayor Nir Barkat's Jerusalem Will Succeed faction.
Israel
The State of Israel is a parliamentary republic located in the Middle East, along the eastern shore of the Mediterranean Sea...
retail supermarket chain, behind Shufersal
Shufersal
Shufersal , commonly known as Super-Sal, is the largest supermarket chain in Israel. In 2009, Shufersal had 240 stores and 10,000 employees. Shufersal stock is traded on the Tel Aviv stock market and appears on the Tel Aviv 100 index.-History:...
Ltd. and Alon Holding–Blue Square Ltd., with annual revenues of NIS 1.81 billion (US$53 million). Founded in 1976 on Rehov Hashikma (Sycamore
Ficus sycomorus
Ficus sycomorus, called the sycamore fig or the fig-mulberry , sycamore, or sycomore, is a fig species that has been cultivated since ancient times...
Street) in the Mahane Yehuda Market
Mahane Yehuda Market
Mahane Yehuda Market , often referred to as "The Shuk", is an outdoor marketplace in Jerusalem, Israel. Popular with locals and tourists alike, the market's more than 250 vendors sell fresh fruits and vegetables; baked goods; fish, meat and cheeses; nuts, seeds, and spices; wines and liquors;...
district, Rami Levi was Israel's first discount store. The chain claims to slash the price of the average basket of goods by as much as 20%. The company went public on the Tel Aviv Stock Exchange
Tel Aviv Stock Exchange
The Tel Aviv Stock Exchange in Tel Aviv is Israel's only stock exchange.The TASE is the only public market for trading securities in Israel. It plays a major role in the Israeli economy....
in 2007 and has increased its sales volume and number of stores each year since.
Rami Levi operates a chain of 21 discount supermarkets in Central and Northern Israel employing 3,000. It also distributes wholesale to 450 stores in and around Jerusalem. The company has diversified into retail clothing sales, real estate, and cellular communications.
History
Rami Levi Hashikma Marketing was founded by Rami Levi (born 1955, Jerusalem, Israel), one of six children of an Israeli-born father and IraqiHistory of the Jews in Iraq
The history of the Jews in Iraq is documented from the time of the Babylonian captivity c. 586 BCE. Iraqi Jews constitute one of the world's oldest and most historically significant Jewish communities....
-born mother. He grew up in poverty in a one-room tin shack with a shared kitchen and bathroom in the Nachlaot
Nachlaot
Nachlaot is a cluster of neighborhoods in central Jerusalem, Israel known for its narrow, winding lanes, old-style housing, hidden courtyards and many small synagogues. Neighborhoods in Nachlaot include Mishkenot Yisrael, Ohel Moshe, Mazkeret Moshe, Zichron Yosef, Sukkat Shalom, Zichron Yaakov,...
neighborhood. Shopping with his mother in the nearby Mahane Yehuda Market (the "shuk"), Levi came to the realisation that there were price differentials available to wholesalers, who preferred selling to retailers to dealing with individuals. Upon completing his army service in 1976, he rented a 40 square metres (47.8 sq yd) stall on Hashikma Street, one of the commercial streets of the shuk, and opened a store selling goods at wholesale prices directly to individuals. He named his new company after himself and the street he was located on.
Levi said he initially bought goods from a wholesaler and sold them at cost. After three months, he bought goods directly from the importer whilst maintaing his wholesale selling prices, thus becoming the first discount store in Israel. In the early 1980s Levi opened his second, 80 square metres (95.7 sq yd) store.
In May 2007 the company, which had eight branches and a market valuation of NIS 430 million, made its initial public stock offering on the Tel Aviv Stock Exchange. Within two years, the number of branches doubled to 16. The company now plans to expand to 30 branches by 2011.
Rami Levi introduced supermarket price war
Price war
Price war is a term used in economic sector to indicate a state of intense competitive rivalry accompanied by a multi-lateral series of price reduction. One competitor will lower its price, then others will lower their prices to match. If one of them reduces their price again, a new round of...
s to Israel by promoting low prices and discounts in advance of Jewish holiday
Jewish holiday
Jewish holidays are days observed by Jews as holy or secular commemorations of important events in Jewish history. In Hebrew, Jewish holidays and festivals, depending on their nature, may be called yom tov or chag or ta'anit...
s. For example, for one week in 2008, the chain sold milk for less than the price of water, and drove headline prices of chicken down to 0.79 shekels per kilo. For Rosh Hashanah
Rosh Hashanah
Rosh Hashanah , , is the Jewish New Year. It is the first of the High Holy Days or Yamim Nora'im which occur in the autumn...
2010, it again grabbed headlines by offering chicken, apples and honey at 1 shekel per kilo (13 cents per pound). Similar promotions were carried out for Passover
Passover
Passover is a Jewish holiday and festival. It commemorates the story of the Exodus, in which the ancient Israelites were freed from slavery in Egypt...
2011.
In 2009 the chain's discounting policy began to make a dent in the market share of Israel's leading supermarket chains, Shufersal Ltd. and Blue Square-Israel Ltd. Industry analysts attribute the chain's success to Levi's management strategy and marketing skills. Rami Levi Hashikma Marketing stock trades in the TA-75 and TA-100 indexes at a market cap of NIS 1.77 billion (US$52 million)(2011).
Locations
Rami Levi supermarkets are located in several Jerusalem neighborhoods as well as in AfulaAfula
Afula is a city in the North District of Israel, often known as the "Capital of the Valley", referring to the Jezreel Valley. The city had a population of 40,500 at the end of 2009.-History:...
, Haifa
Haifa
Haifa is the largest city in northern Israel, and the third-largest city in the country, with a population of over 268,000. Another 300,000 people live in towns directly adjacent to the city including the cities of the Krayot, as well as, Tirat Carmel, Daliyat al-Karmel and Nesher...
, Kastina, Mevasseret Zion, Modiin, Nesher
Nesher
Nesher is a city in the Haifa District of Israel. In 2011, Nesher had a population of 23,000. The mayor of Nesher is David Amar.-Etymology:...
, Netanya
Netanya
Netanya is a city in the Northern Centre District of Israel, and is the capital of the surrounding Sharon plain. It is located north of Tel Aviv, and south of Haifa between the 'Poleg' stream and Wingate Institute in the south and the 'Avichail' stream in the north.Its of beaches have made the...
, Pardes Hanna, Ramat Gan, Rosh Haayin
Rosh HaAyin
Rosh HaAyin is a city in the Center District of Israel. To the west of Rosh HaAyin is the fortress of Antipatris and the source of the Yarkon River. To the southeast is the fortress of Migdal Afek...
, Tiberias and Zichron Yaakov. There are also four locations in the Judea and Samaria Area, ie., Beitar Illit, Gush Etzion
Gush Etzion Junction
Gush Etzion Junction ' also known as Gush Junction is a business, commercial and tourism center in the southern West Bank which serves as the entry point to the Gush Etzion bloc of settlements. It is administered by the Gush Etzion Regional Council...
, Shaar Binyamin Industrial Park and Mishor Adumim
Mishor Adumim
Mishor Adumim is an industrial park located in the industrial zone of Ma'aleh Adumim, about 10 minutes from Jerusalem, Israel.Since 1998, the park has been managed by the Ma'aleh Adumim Economic Development Company Ltd...
. Levi's stores in the West Bank
West Bank
The West Bank ) of the Jordan River is the landlocked geographical eastern part of the Palestinian territories located in Western Asia. To the west, north, and south, the West Bank shares borders with the state of Israel. To the east, across the Jordan River, lies the Hashemite Kingdom of Jordan...
are often cited as a model of Arab-Jewish coexistence, as Arabs and Jews shop and work there side-by-side.
In 2010 the locations in Judea and Samaria, which attract thousands of Palestinian shoppers and top Palestinian Authority officials, – and which are staffed by both Arabs and Jews, were targeted by the PA's anti-Israeli goods campaign. For several months the PA attempted to discourage Arabs from shopping at Rami Levi supermarkets, culminating in an official boycott
Boycott
A boycott is an act of voluntarily abstaining from using, buying, or dealing with a person, organization, or country as an expression of protest, usually for political reasons...
of the chain in September 2010. At the same time, there were concerns among some Orthodox Jews in the area regarding security and especially the issue of intermixing between the male Arab shelving staff and the female Jewish cashiers. All these issues have been largely put aside by the local populations, as witnessed by the multi-ethnic crowds that fill the stores on any given afternoon.
In-house brand and outlet stores
Rami Levi Hashikma Marketing markets a house brand called Hamutag , which includes food, detergents, and toiletries. Some stores have "Pizza Hashikma" and "Burger Hashikma" outlets which sell fast food at a discount. The chain also includes an in-house store called Yafiz which stocks low-priced clothing and shoes for men, women, teens, children and infants.Real estate development
In 2000 Rami Levi purchased a plot in the Har NofHar Nof
Har Nof is a neighborhood on a hillside on the western boundary of Jerusalem, Israel, with a population of 20,000 residents, primarily Orthodox Jews.-History:...
neighborhood of Jerusalem zoned for 100 housing units. He also invested 145.5 million NIS (US$36.3 million) in land for 265 apartments in the Holyland complex. In 2008, he bought the rights to SBH Sha'ar L'Yerushalayim for 15 million NIS (US$3.95 million), making him the controlling shareholder of a company that owns land on Hebron Road
Highway 60 (Israel)
Highway 60 is a north-south intercity road in Israel and the West Bank that stretches from Beersheba to Nazareth.-Route:The route is also known as the "Route of the Patriarchs" since it follows the path of the ancient highway that runs along the length of the central watershed, and which...
zoned for 240 housing units, a hotel, and commercial and industrial space. In 2009 he bought Delek Real Estate's share of the Jerusalem Railway Station
Jerusalem Railway Station
The Jerusalem Railway Station is a former railway station located in the area between Hebron Road and Bethlehem Road, near the German Colony of Jerusalem, Israel. It was part of the Jaffa–Jerusalem railway until its closure in 1998...
compound on Derech Beit Lehem for about 13 million (US$3.6 million); the site is zoned for 1000 housing units. In 2010 Levi partnered with Amikam Ben-Zvi and Housing and Construction Real Estate to buy 13 million NIS (US$3.6 million) worth of land in the Givat HaMatos
Givat HaMatos
Givat HaMatos is a caravan village in southern Jerusalem. It is populated by members of the Ethiopian Jewish community living in Israel. The village encompasses an area of approximately 170 dunams. It is bordered by Talpiot in the north, Hebron Road in the east, Gilo in the south, and Beit Safafa...
area in Jerusalem, also zoned for 1000 housing units. However, Levi blames slow progress on developing the company's recent acquisitions on bureaucratic red tape by planning authorities.
In 2011 Levi made headlines with his bid to take over the development of the Nofei Tzion luxury housing product in the East Jerusalem neighborhood of Jabel Mukaber
Jabel Mukaber
Jabel Mukaber is a predominantly Arab neighborhood in southern East Jerusalem. It is bordered by Armon HaNetziv to the west, Abu Tor and Silwan to the north and Sur Baher to the south...
after developer Digal made a debt settlement with creditors. When the identity of the competing bidder – Arab-American businessman Bashar Masri
Bashar Masri
Bashar Masri is a Palestinian-American entrepreneur, born and raised in Nablus, educated in Egypt and the United States. Trained as a chemical engineer and with a background in management consulting, Bashar moved back to Ramallah from the Washington DC area in the mid-1990s, establishing himself...
– was announced in the Israeli newspapers, nearly 77 percent of bondholders voted to negotiate with the group of Jewish investors headed by Levi.
Rami Levi Hashikma Marketing owns 65% of the land on which its supermarkets stand, including approximately 35000 square metres (41,859.7 sq yd) of land in Mevasseret Zion, Modiin, Gush Etzion, and Pardes Hanna. The company uses its own equity
Equity (finance)
In accounting and finance, equity is the residual claim or interest of the most junior class of investors in assets, after all liabilities are paid. If liability exceeds assets, negative equity exists...
– estimated at NIS 500 million (US$139 million) – for its commercial real estate purchases.
Cellular communications
In September 2010 Rami Levi Hashikma Marketing became the fourth company in Israel to receive a mobile virtual network operatorMobile virtual network operator
A mobile virtual network operator is a company that provides mobile phone services but does not have its own licensed frequency allocation of radio spectrum, nor does it necessarily have all of the infrastructure required to provide mobile telephone service...
license from the Israel Ministry of Communications
Communications Minister of Israel
The Communications Minister of Israel is the political head of the Israeli Ministry of Communications and a relatively minor position in the Israeli cabinet. The post was established in 1952, and until 1970 was known as the Minister of Postal Services...
. The company previously announced in a 2010 statement to the Tel Aviv Stock Exchange that upon receiving this license, it would open a new subsidiary, Rami Levi Hashikma Marketing Communications Ltd., and sell advanced mobile telephone services in its supermarkets. In February 2011 Rami Levi signed an agreement with Israeli mobile phone provider Pelephone
Pelephone
Pelephone is an Israeli-based telecommunications company, founded in 1986 as a joint venture between Motorola and Tadiran, today owned by Bezeq. It was the first company to offer mobile phone services in Israel. Due to this, the brand-name "Pelephone" became the genericized trademark for mobile...
, allowing the supermarket chain to use Pelephone's infrastructure to provide cellular phone services.
Personal
Levi employs many family members in his business, including his wife, Chief Financial Officer Adina Levi, and Vice President of Operations Shmulik Levi. Rami and Adina Levi have four children and live in the GiloGilo
Gilo is a neighborhood in southern East Jerusalem with a population of 40,000, mostly Jewish. It is one of the five ring neighborhoods of Jerusalem and is built on land in the West Bank that was annexed to Israel in 1980 under the Jerusalem Law. The international community regards it as an...
neighborhood of Jerusalem. Levi is also a member of the Jerusalem City Council as part of Mayor Nir Barkat's Jerusalem Will Succeed faction.