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CORRECTION - Alon Holdings Blue Square Israel Ltd: Alon Holdings Blue Square - Israel Ltd. Announces Financial Results For The First Nine Months And Third Quarter Of 2011

The Company filed a petition with the high court of justice seeking to suspend and even cancel the reduction of the marketing margin. The court resolved to remand the case for hearing at the ministry of infrastructures and allotted a three month period to render a decision in this case.  Until such decision is made, the reduction shall remain in force.

Dor Alon acts to reduce the effect on its profitability following the reduction of the marketing margin.

BSRE continues to expand its operations and presents an increase of approximately 12% in income from rental fees and an improvement in NOI of approximately 12.1% in the first nine months of 2011 compared to the corresponding period last year.  

Currently, we continue our preparations to launch a virtual operator (MVNO) and act to install and assimilate computerized system (billing). We intend to commence deployment in the fourth quarter in points of sale and service in Mega and Dor Alon branches and offer the customer club members of the Company a unique range of services and mobile phones. The launch of the network is expected to take place in the second quarter of 2012."  

In regards to the supermarket and non-food segments, Mr. Zeev Vurembrand, CEO, said: "Deepening competition and the public protest were two trends that significantly impacted the retail food segment in the first nine months of the year. Deepening competition was reflected in accelerated opening of commercial spaces and converting branches into hard discount formats. The public protest impacted consumption habits, in general, and food consumption, in particular, which is shown in decline of sales in the supermarkets segment in the third quarter. In addition, the increase in expenses related to minimum wages and rental fees caused an erosion of the operating income in the supermarkets segment.

The Company commenced taking efficiency measures cutting back on headquarters expenses and selling expenses including downsizing personnel in the headquarters and other expenses. These measures are taken as part of the Company's response to the new competitive situation.  

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