What’s left of the big social protests that took place in Israel in 2011? The real estate bubble continues to inflate, the famous Israeli Milky puddings are still cheaper in Europe than in Israel, and feisty political activist Stav Shafir has already become part of the everyday Knesset scene. Yet, there are some ideas that became popular as a result of the social protests – the cooperative trend, for one. Why take a loan from a bank when you can turn to a social organization that facilitates borrowing from one another? Why pay the extra supplier fees at the local grocery store when you buy basic staples, when you can establish a social supermarket that lowers product prices to cost value?
It turns out that before this trend became a trend, there was already a social supermarket in Binyamin. In contrast with quite a few social supermarkets, which were very expensive to establish and have already closed their doors, “My Brother Yaakov” supermarket in Binyamin opened 18 years ago with a NIS 20,000 loan, and today turns over approximately NIS 2,000,000 in annual sales. Who is the entrepreneur behind this success story? Is it indeed possible that pressure could lower the cost of living on a national level? How do you successfully operate a social supermarket for almost two decades? We met with Tal Yekutiel, the entrepreneur behind “My Brother Yaakov.”
A Social Supermarket in Binyamin: Long Before the Trend
Tal Yekutiel, who lives in the community of Kochav Yaakov in Binyamin, understood the huge potential of the social supermarket idea 18 years ago. After his brother, Yaakov Yekutiel, was killed when a gas balloon exploded in his home, Tal felt compelled to do something meaningful in his memory. With not much money in his pocket, he thought that the best way to start would be to give back to society.
At first, Tal sold fruits and vegetables from a truck on the street, and then started selling under the pergola in his yard. When the customers kept buying his entire inventory each day, he moved to an organized store in the town’s industrial zone.
Tal, before we begin, can you explain to me what a social supermarket is?
Sure. “My Brother Yaakov” is a registered association and its purpose is to do good for others. I tried to think of the best way to help people, and I understood that in fruit and vegetable sales, supermarkets are making profits of 100% or even higher. We sell at cost value and sometimes even give away groceries for free to help families who need some assistance.
To open a cooperative, you need a pretty big initial investment, don’t you?
Yes, cooperatives like ours are usually organized associations that started out with solid financing. We grew from the bottom up. The equity that I had available when I started out totaled NIS 20,000. Today, we have an organized store in the town’s industrial center. It all began, was built and runs on our efforts and our physical contribution of time and labor to come, organize the products and sell.
Looking back – do you understand how all of this happened?
When I look back today, I don’t believe that I did all of this. When I was selling out of my house, for example, my entire living room was filled with produce. I also don’t know how my wife let me do it. But willpower and belief in this idea, in something that is ultimately good and unique, gave me the power to keep going. Our situation today is different, the personal sacrifices are smaller perhaps, but a different kind of sacrifice is required – to keep at it and not lose momentum despite the routine.
Our sales turnover is NIS 160,000 a month. Why am I so excited about that number? Because that type of sales turnover is parallel to a store that operates 24/7. We’re only open twice a week!
20% Cheaper than Rami Levy
Are there volunteers who help you with the ongoing operation of the supermarket?
Definitely. At the beginning, I did everything myself. But over time, various volunteers from the regional council joined me. Today, we have volunteers from the Israel Lottery, schools, youth movements and even retirees. It’s a joint project – shared by everyone who feels that giving and helping others is important.
Do your customers take your prices for granted or are they impressed by them?
I receive positive, excited reactions all the time. People tell me that they pray for me every day because “you have no idea how much you are sustaining us.” Here’s a message that a customer recently sent to my phone: “Thank you for the tasty food that we ate this Shabbat because of you.” Reactions like these are what give me the energy and willpower to keep running this business, and even grow and develop it.
Are there profits from the supermarket as well?
The supermarket is not run for profits. No one receives a salary from it. The idea is to cover the costs of operating the store. The costs are NIS 10,000 a month, which might sound like a big figure, but sales at the supermarket cover it without a problem, because a lot of people buy from us. Our sales turnover is NIS 160,000 a month. Why am I so excited about that number? Because that type of sales turnover is parallel to a store that operates 24/7. We’re only open twice a week!
So if the supermarket is not for profit, what do you do with the money that is left over?
With the profits that accumulate, we distribute food stamps. For example, we prepared 172 food baskets valued at NIS 600-700 each. We don’t give out the food baskets, but instead sell them for NIS 200. We didn’t divulge their actual value to the people who buy them. We told them that their value was just NIS 350.
When you say “cheap prices,” how cheap are you talking about?
Based on a comparison I did with Rami Levy, which is the chain of supermarkets that prides itself in having the cheapest prices in the country on basic staple items, we are 20% cheaper. We are overwhelmingly at least 50% cheaper for produce.
“The store belongs to all of us, and we’re all partners”
What type of products can be found on your shelves?
We carry all of the necessary products. From fruits and vegetables to meat, chicken, fish, dairy products, bread, rolls, pita bread, canned goods, cakes and cookies. Pretty much everything.
Can customers also work for you in exchange for groceries?
No. The customers come and buy their groceries. But the store belongs to all of us, and we’re all partners. That’s something that everyone can feel. I’m not ashamed to ask people to lend a hand if there’s pressure and we need help, and customers sometimes help bag the groceries, run the cash register, etc. They do it out of a feeling of commitment to the store, not because they have to. We aren’t doing them a favor and they aren’t doing us favors. This is a social supermarket dedicated to doing good.
Today, about 300 families from the Binyamin region shop here. My current goal is to reach 3,000 families. We need to spread the good news, convince people that it’s a real option, and that the cost of living can decrease if you and I want it to happen.
“The suppliers fight over who gets to sell us products”
If the products are so cheap, do you sometimes need to compromise on their quality?
Definitely not. We work with big suppliers from all over the region. Because of my large buying power, I can compare three different suppliers and receive the cheapest offer, but still make sure it’s the highest-quality offer. We’ve become so attractive that they fight over who will sell products to us.
What are the challenges and difficulties in running this type of project?
The challenges are constantly changing. Our current challenge is to reach customers outside of Kochav Yaakov. Today, about 300 families from the Binyamin region shop here. My current goal is to reach 3,000 families. We need to spread the good news, convince people that it’s a real option, and that the cost of living can decrease if you and I want it to happen.
When you reach 3,000 families, what’s next?
The next challenge is to break into the market on a national level. My vision is for tens of thousands of families to be able to enjoy our initiative. If our operations become nationwide, competition between the other supermarkets will also force the entire market to lower its prices.
If Rami Levy, for example, lowers his prices even further, this won’t threaten your operations?
I have no problem with a supermarket like Rami Levy lowering its prices as a result of competition with our supermarket. If a competitor lowers prices because it feels threatened, we met our goal indirectly – we’ve still brought down prices for customers in Israel. Our rationale is that there’s no problem with prices going down in other places, because we aren’t even interested in earning a profit, only in covering costs.
Do you have the resources to take that plunge?
We want to find an idealistic investor who is interested in changing Israeli society and recruit him for this successful initiative. We’d first like to reach all of the local residents, and then begin operating on a national scale.
What will be happening here in 2067, in your opinion?
Fifty years is a long time. If it succeeds, I hope that it will be the largest supermarket chain in the country, with branches everywhere, run by college students, youth groups, socially idealistic groups and more.
We can’t explain it, but our conversation with Tal Yekutiel has given us newfound energy to fight to lower the cost of living. At the end of the interview, we asked Tal if there’s any way to help him. “Just give us a call, and we’ll find you something to help with – we always need help,” he says with a smile, and asks to include his personal cell phone number: 050-9233095. Have you written it down yet?