Super marketer

Rami Levy, Jerusalem’s city councillor-supermarket mogul-Independence Day torch lighter – talks about bringing down consumer prices and his political aspirations.

By MOSHE STEINMETZ
Rami Levy (photo credit: MARC ISRAEL SELLEM/THE JERUSALEM POST)
Rami Levy
(photo credit: MARC ISRAEL SELLEM/THE JERUSALEM POST)
Rami Levy “still can’t believe” he has been chosen to light a torch at the upcoming Independence Day ceremony on Mount Herzl.
The supermarket mogul, one of the 12 people selected to receive the annual honor, says he will be lighting the torch “in honor of my parents, may they live to 120, in honor of my family, my thousands of employees, my customers and all of the people of Israel.”
He recalls how, after completing his IDF service four decades ago, he opened a little store in Jerusalem, which he slowly built up into a huge retail chain that is now worth more than NIS 2.5 billion.
He has also established a mobile telecommunications company and, soon, a television service.
A few weeks ago, he says, he received a call at 10 p.m., on a Saturday, “in which I was told that I had been picked to light a torch at this year’s Independence Day ceremony. I couldn’t believe my ears. I said to myself, ‘Maybe I should wait and see if this is for real.’ So I waited until I saw it written in the paper,” he says with a smile.
“The only person I told that first night was my wife, Adina, who was as excited as I was. She kept telling me how much I deserved this honor.
In the morning, it was already in the papers, and the phone calls and text messages started flowing. Only then did it sink in that it was for real.”
After responding to all the messages, Levy decided to visit his Jerusalem store, where he was overwhelmed by the support and good wishes he received from customers.
“Everyone kept telling me, ‘You deserve this.’ Every day, people tell me, ‘Rami Levy, thank you for enabling me to buy the necessities I need for my family. I wouldn’t be able to afford these items anywhere else.’ I become all emotional every time I hear this. Receiving the honor of lighting a torch at this year’s ceremony is another confirmation of what I hear everywhere I go.”
The committee that chose this year’s torch-lighters – all of whom are pioneers in their fields – wrote of Levy that his “courageous initiative forced Israel’s largest supermarket chains to slash their prices in order to stay competitive. Levy proved that it’s possible to combine a philosophy of social responsibility with economic success. Levy aims to help the public save on consumer costs and to reduce social gaps.”
When he opened his first store, he says, he never imagined he’d reach where he is today.
“The method I use can be adapted to any field,” he says. “I wanted to create a huge amount of demand and sell in such large quantities that I’d be able to sell at rock-bottom prices and thereby make life easier for consumers.”
It all began in 1976, when he came home from the grocery store with his mother.
“My mother wanted to buy products at lower prices, so she approached a wholesaler, who told her he couldn’t sell her [any] products, because he only sold in bulk to stores. It was so painful for me to see how desperate my mother was to find a place where she could buy groceries at reasonable prices.
So when I finished my army service, I opened a small store where people could by products at wholesale prices.”
BUT HE wasn’t satisfied with a 40-square-meter store on Hashikma Street, near the Mahaneh Yehuda market, so he opened a large supermarket in the industrial area of Talpiot – the second of the more than 30 Rami Levy branches that are in operation today.
“My idea for the business when I opened my first store was to sell huge quantities at rock-bottom prices. My goal was to enable people with little means to be able to afford to buy groceries. I wanted to create a huge demand, and indeed, many Jerusalemites began doing their shopping in my stores.”
Levy was still working along this principle when he opened his third store in Modi’in.
“When Modi’in was being built and real-estate prices there were still low, many Jerusalemites moved there, but would still come to the Rami Levy in Talpiot to do their grocery shopping. Often, longtime customers would approach me and say, ‘Rami, could you please do us a favor and open up a branch in Modi’in, because the long drive here is killing us.’ So I went to Modi’in to check it out, and I discovered that my customers were right – everything there was incredibly expensive. I followed the same business model with this store, too: selling large quantities at rock-bottom prices. I was able to reduce families’ grocery budgets by 50 percent, which drew huge crowds to my store.
So I kept opening more and more branches, and as a result, I’ve been able to help so many people over the years.”
According to the 2013 BDI retail chain rating, Rami Levy is the country’s third-largest chain, with 8.2% of the food-store market and revenue of NIS 2.79b. Even though the two top players – Shufersal and Mega – together hold about 50% of the market, Levy believes that his revolutionary method has completely changed the way people shop.
“Everywhere I go, I bring competition,” he says. “How did someone put it? ‘Even people who don’t shop at Rami Levy are now buying at other places with discounted prices.’ So I’ve benefited doubly: Either people are buying at my stores at low prices, or they’re shopping at other places that also offer decent prices.”
This revolution is what he feels has earned him the honor of lighting a torch at the Independence Day ceremony.
“The large chains realize that my way is the right way. I’m leading the way, and everyone is following me,” he says. “I cannot provide for all of the people of Israel, but I’ve done the best I can, and I think I’ve succeeded in reaching this goal.”
Asked about rumors that he’ll be selling steak for a shekel a kilo on Independence Day, he responds that “there will be many fantastic deals that day, and our everyday prices are excellent anyway” – though he does not confirm the low steak price.
“We will definitely sell at least two or three products for NIS 1,” he says.
THE COUNTRY’S high cost of living played a major role in the recent election campaigning. The public holds Levy in high esteem, and his public statements about how to lower the cost of living have made him popular. As a result, he received a number of offers to join political parties, in realistic spots.
“I received offers from four separate parties,” he claims, but prefers not to reveal which ones. It is believed he met with his close friend Moshe Kahlon of Kulanu, and that the Likud approached him as well, but he turned them both down.
Still, Levy – who serves on the Jerusalem city council as the second-term coalition chairman on behalf of Mayor Nir Barkat –has said that he has not ruled out running for the Knesset at some point in the future.
“At the moment, my politics are focused on my 6,000 employees and two million customers. I’m not ready to enter national politics right now, but I’m not ruling it out for the future,” he says. “The moment I see that I’ve given all I can in my current role, I will move on to contribute elsewhere. I will always be there for the people.”
In the meantime, he is not getting over-excited by politicians’ promises to lower prices for consumers.
“We hear all the politicians making promises – especially just before elections – that they’ll bring down prices. But I have yet to see a politician take it seriously and analyze the details and numbers.”
What about Kahlon? “Kahlon did an amazing job in the cellular [phone] field,” Levy acknowledges. “I was the first one to enter the market and offer reduced prices. Instead of NIS 700, I offered the same service for NIS 100. And then prices went down even more when the competition began. If our aim is to offer services to consumers, there are many reforms that we can carry out. But there are changes that the private sector cannot make on its own before serious reforms are implemented. Certain services offered by the public sector have no competition and are rife with layers upon layers of bureaucracy.
Removing these layers could lower real estate prices by at least 15% or 20%.”
Levy believes that Israel’s dire housing problem is the most urgent issue leaders need to tackle.
“Most people think that high grocery prices are what’s killing them, but the real problem is high real estate prices. Outrageously high mortgage and rent payments are what’s hurting middle-class citizens the most. And the Israel Lands Authority and government bureaucracy are to blame. Currently, when you buy land, it takes longer for a license to be issued than it does to construct an entire building.”
He heavily criticizes the current system of auctioning off land.
“If the Lands Authority were to change the system and stop selling the land to the highest bidder, this would benefit everyone twofold,” he argues. According to him, the biggest problem with the current method is that the base price keeps rising to the closing price of the previous bid.
“Let’s take, for example, the Har Homa neighborhood of Jerusalem,” he says. “Seven years ago, land for each apartment unit was being auctioned at NIS 100,000. Then one contractor agreed to pay NIS 200,000 for the same land, and so the next tender began at NIS 200,000.”
He asserts that “when the state sells land to the highest bidder, it increases the gap between the rich and the poor, because only certain people will be able to afford to live in certain areas. Land must be sold by lottery so that everyone has a chance to pick where they live.”
Surprisingly Levy, who has become the national symbol of consumer awareness, believes that security is the most important issue at hand.
“Economics are important, but without security, we won’t have a state at all. What can we do? We live in the Middle East. If we don’t live in safety, then the economic situation will never improve. Only someone who is strong on security will succeed in strengthening the economy.”
• Translated by Hannah Hochner.


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