A delegation from Walmart is expected in Israel in the coming weeks to examine the possibility of opening stores here, a report in Globes said last week. But discount supermarket king Rami Levi is not concerned that Walmart’s arrival will harm his business, he said in an interview with 103 Radio. “Competition is a good thing, and I invite all those who wish to compete to do so. Our company invented competition in Israel, and we have managed to reduce the cost of groceries for Israelis.”
A report on Bloomberg News last week indicated that Walmart could be making its way to Israel. According to the report, Prime Minister Binyamin Netanyahu met with top Walmart executive John Furner at the recently completed World Economic Forum in Davos, Switzerland, and urged him to open branches in Israel.
The purpose of the entry of Walmart into Israel would be to use the retailing giant’s leverage to reduce the cost of household and everyday goods for Israelis, with the retailer expected to discount in Israel as it does in the U.S. According to the report, Netanyahu offered several incentives to the company, including reducing the level of regulations that importers generally need to comply with, as well as providing tax and other economic incentives.
Present at the meeting, according to the report, was Netanyahu economic advisor Avi Simhon. The report quoted him as saying that Netanyahu “made it clear we are ready to ease regulatory burdens wherever possible to make the market more accessible to them. The door to Netanyahu’s office is open,” he told Bloomberg. Walmart had no comment on the matter, the report added.
But Levi does not believe Walmart will actually set up shop here. “It will be hard for them to manage here. Unlike in other places, Walmart will have to deal with issues like kashrus and the fact that most of the food products sold in Israel are manufactured here. As such it will not have any advantage over other grocery chains. I don’t think they will be able to reduce operating costs below that of other chains.” If the government wants to give out tax credits and other benefits to Walmart, it should do so for all grocery chains, he added.