Blue Square-Israel Opens Another Mega - 4Th in New Chain of Giant Supermarkets

Business Wire, April 10, 2000

Business Editors

ROSH HA'AYIN, Israel--(BUSINESS WIRE)--April 10, 2000

Blue Square-Israel Ltd. (NYSE: BSI) today announced that it has opened a fourth branch of its major new MEGA supermarket chain. The new 8,000 square meter store, located in Be'er Sheva, employs more than 250 workers and offers a selection of approximately 40,000 value-priced items. The Company's first three MEGA branches, located in Haifa, Holon, and Hadera, have become the best performing of the Company's 166 stores.

MEGA is positioned as the best-value supermarket chain in all of Israel, with guaranteed lowest prices for all items. Operating as a club, the store offers MEGA members a 5% discount on all store purchases. MEGA supermarkets are very large, located in 5,000-8,000 square meters, and boast a particularly wide range of food items. In addition, the stores have departments for housewares, gifts, textiles, and health care, and will soon include franchised "stores-within-a-store" such as banks, pharmacies, electrical appliance boutiques, opticians, computer stores, film developers, cellular telephone marketers, jewelry stores, shoe shops, etc.

Commenting on the news, Yoram Dar, President and CEO of Blue Square, said, "We are very excited to open another MEGA branch. We initiated the chain last year to give Israeli consumers maximum value, and to offer efficient one-stop shopping. Each of the first three branches has performed beyond our expectations, quickly outpacing other store formats on the basis of revenues per meter and other metrics. We plan to open an additional three MEGA branches by the end of the year, and will eventually open MEGAs throughout the country. MEGA has quickly become a key component in our strategy to reach a new level of revenues during the year 2000."

Blue Square is a leading retailer in Israel. A pioneer of modern food retailing in the region, Blue Square currently operates 166 supermarkets and specialty stores under different formats, each offering varying levels of service and pricing. For more information, please refer to Blue Square's website at www.coop.co.il

The statements contained in this release which are not historical facts contain forward-looking information with respect to plans, projections, or future performance of the Company, the occurrence of which involve certain risks and uncertainties, including risk of market acceptance, the effect of economic conditions, the impact of competitive pricing, supply constraints, the effect of the Company's accounting policies, as well as certain other risks and uncertainties which are detailed in the Company's filings with the Security and Exchange Commission, particularly the prospectus with respect to its public offering in July, 1996.