Carrefour Israel May End "Basket of Israel" Discount Program

Carrefour Israel, a major supermarket chain, is considering discontinuing its participation in the "Basket of Israel" discount initiative, according to sources speaking to the economic publication "Calcalist." The decision is reportedly driven by new CEO Inbal Herzon and follows disappointing second-quarter sales results, which saw a 7.6% drop compared to smaller declines at competitors.

The "Basket of Israel" program, launched by Economy Minister Nir Barkat, obligates participating retailers to maintain lower prices on a list of 100 essential goods until mid-October 2026. Carrefour Israel, the sole bidder in a government tender, won the program by offering prices 21.8% below the ministry's target and 30.3% below average prices at discounters. In exchange, the government allocated 50 million shekels for advertising the chain.

However, internal projections for a 214 million shekel sales increase by 2026 due to the program have not materialized. A Tel Aviv University study in late June indicated that while Carrefour offered discounts on the 100 "basket" items, it simultaneously raised prices on other goods in similar categories by an average of 6-9%, potentially negating any savings for consumers. Competitors like Shufersal and Osher Ad largely ignored the initiative.

Carrefour is awaiting sales data from the upcoming Jewish holidays before making a final decision. If the company withdraws, prices on the "Basket of Israel" items will revert to normal levels, potentially impacting Minister Barkat's flagship anti-inflation project just weeks before the October 27th elections.