Rami Levy Chain Stores Hashikma Marketing 2006 Ltd. (TASE:RMLI) CEO Rami Levy told "Globes" that he is not firing employees, expects to create 1,000 new jobs, and supports the social protest. He stresses the importance of modesty and explains that the secret of his success against his rivals is low expenditure on company head office.
He said, "Whoever buys my shares knows what he is doing."
Globes: The profits of retail chains are being greatly eroded. Is it possible to survive this price war?
"I'm surviving because of one simple thing my head office operating costs are much lower than the operating costs of my rivals head offices, and my sales per square meter are triple the sales of rivals. I give more service in the store and invest more in the store. For example my rival might put four employees in the vegetables section and I'll put eight employees. But on the other hand, in head office I have less staff."
The price war means that you probably won't have any choice but to lay off staff as the only way of reaching profitability in this period?
"Not in my business. On the contrary, I created 1,000 jobs in 2011. In 2012, I'll create almost another 1,000 jobs because I'm opening new stores. There is nothing like that in my company and I'm not even thinking about firing people."
Asked about the social protest, Rami Levy said, "The protest is very just. The middle class has seen living standards so eroded that it is difficult to live. At first they went for the private sector and they were right because people there have somewhat overdone things. They've overdone things a lot. But the person to blame that they have overdone things are the regulator and the public sector which has not supervised them. I think that everywhere that something is expensive, we must check out why it is expensive."
He added, "Look what's happening with housing. Five years ago a young couple paid NIS 2,000 a month for a three or four bedroom apartment in Jerusalem. The same apartment costs NIS 6,000 today. A young couple that wanted to buy an apartment five years ago, say on Har Homa in Jerusalem, would pay a mortgage of NIS 2,000 per month. Today for the same apartment they have to pay NIS 4,000 or even NIS 5,000. Who's guilty? The public sector because it controls land in Israel and markets land in a way that pushes up prices."
Published by Globes [online], Israel business news - www.globes-online.com - on June 13, 2012
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