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Giant British Supermarket Forced Out Of Egypt
CAIRO, April 9 (IslamOnline & News Agencies) - The British supermarket group J. Sainsbury's announced Monday it would pull out of Egypt after announcing the company lost millions of dollars in its first year of operation.
The news comes just after the group reported a healthy growth in sales for the first three months of 2001. In spite of the recent upturn in business, the company has incurred losses of over one million pounds ($144 million) within its two years in Egypt, news agencies said.
However, the company denies that its decision is a response to a campaign by Egyptian competitors and some Islamic activists to boycott its stores, launched after the Palestinian uprising which broke out in September over Israeli encroachments on Muslim holy sites.
Sainsbury's blamed the losses on a "deterioration of the trading environment" in the Middle East and difficulty in obtaining new licenses from the Egyptian government, reported the BBC online service.
Shortly after the Palestinian uprising erupted, Egyptian students threw stones at two Sainsbury's supermarkets in the suburban town of Maadi, southern Cairo, convinced the owners were Jewish and supporters of Israel. Riots were also reported outside another branch in Giza, north of Cairo.
Last December, Sheikh Mohamed Sayed Tantawi of Al-Azhar, the world's highest authority on Sunni Islam, publicly called for a boycott of products that benefit Israel but did not publicly mention the British superstores.
J. Sainsbury's, for its part, has consistently denied any links with Israel, but many Egyptians remain unconvinced.
Explaining the decision to pull out to the BBC, Sainsbury's chairman Sir Peter Davis said: "It's a developing market and we went in with a very ambitious program. I think we tried to go in too far, too fast."
J. Sainsbury's has also often sought to distance itself from Israel after word spread it was giving funds to Israel because, the rumor goes, it was owned by a Jewish woman.
The British chain ran newspapers advertisements last year to improve its image and to prop up sales. One advert was headlined "The Facts" telling the Egyptian public it was not an Israeli company.
"Sainsbury's is a British company owned by 110,000 shareholders," said the advertisement on the widely read daily al-Ahram newspaper. "Sainsbury's never helped, nor it aids Israel politically or financially."
In another appeal for public understanding the chain almost converted to Islam. "There's no God but Allah and Mohammed [SAW] is his messenger and prophet," read a huge banner in Arabic covering the front of the el-Dokki branch in Cairo.
Branch managers said they were trying to protect the branch from rioters and protestors who think the company is pro-Israeli.
Sainsbury's started operating in Egypt in January 2000 and has already invested some $145 million in Egypt, the most populated Arab country.
Already, Sainsbury's has bought stakes in 96 outlets in Egypt. In addition to over a dozen Sainsbury's stores, it has stakes in 51 government franchised Al Ahram 2000 shops, 36 Edge supermarkets and five ABC supermarkets, which will eventually become Sainsbury's stores
A boycott call of American and Israeli products and goods that launched on the Internet has been gaining popularity in Egypt and elsewhere in the Muslim world. University students have also been making Xerox copies of the boycott appeal. Families said they have already boycotted chains like Kentucky Fried Chicken, Pizza Hut and McDonald's.
But newspaper columnists say that Sainsbury's came particularly under strong fire from Egyptian companies for selling its products at below-cost prices. They attribute Sainbury's exit to competitor-inspired campaigns rather than any boycott call.
Strong rumors circulated that the chain's alleged owner, a Jewish woman, was out to bankrupt Muslim and Egyptian retailers.
Several major Egyptian retailers mobilized against the U.K. store, with a host of hostile tactics, including connections to lawmakers, getting some mosque imams to urge believers to boycott the British chain and unsigned leaflets that warn of the "comeback of the Jews."
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