Blue Square-Israel Announces Changes in Board and Names New CFO -- Yakov Gelbard Retires From Board of Directors -- Zvi Bochman Named CFO.

Business Editors

ROSH HA'AYIN, Israel--(BUSINESS WIRE)--Dec. 29, 1999

The Board of Directors of Blue Square-Israel Ltd. ("BSI") (NYSE: BSI) announced today that Yakov Gelbard has retired from his position as a member of the Board of Directors, effective immediately. Mr. Gelbard was General Manager of Co-Op Blue Square Cooperative Society Ltd. ("the Co-Op") from January, 1993, and then continued as CEO of BSI from May, 1996, until September 30, 1999, when he left BSI to pursue other interests.

The Board of Directors has also announced the appointment of Zvi Bochman as CFO of the Company. Mr. Bochman was Head of the Finance Division of the Co-Op from May, 1993, and then continued as Head of the Finance Division of BSI from May, 1996 until today's announcement. He played a central role in the Company's IPO process which was completed at the end of July, 1996.

Commenting on the announcements, Mr. Benny Gaon, Chairman of the Company, said, "We thank Yakov Gelbard for his years of dedicated service to Blue Square, and wish him well in his future endeavors.

"Zvi Bochman has been an important member of Blue Square's team for many years. We are pleased now to confer upon him the title of Chief Financial Officer."

Blue Square is a leading retailer in Israel. A pioneer of modern food retailing in the region, Blue Square currently operates 165 supermarkets under different formats, each offering varying levels of service and pricing.

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.