I think they know what theyre doing. Osher Ad is very successful in Israel. They sell stuff thats not just geared to frum community. One item stood out to me on my visit. Non-CY Wacky Mac. And there were other items.
Have you been there? Chinese and muslims shop there too.
Imo Israeli ppl are much more price sensitive than Americans, so there are a limited amount of frum people that will shop in such a store, Costco will always be cheaper then him , so he’s not going to get they’re crowd