Holiday Shopping Slows as Back-to-School Season Overlaps Rosh Hashanah

Consumer spending in Israel has been notably subdued leading up to Rosh Hashanah, with many shoppers apparently delaying major purchases due to the close proximity of the holiday to the end of summer and the start of the new school year. Data from the Phoenix Gamma index, which tracks credit card activity and consumer behavior in retail sectors, reveals a mixed picture.

While the food sector saw a 9% increase in activity, driven by a 3% rise in transaction volume and a 6% increase in average transaction value, other traditional pre-holiday sectors have underperformed. Fashion retail experienced a 3% decline compared to the previous week, and electronics saw only a modest 2% increase. Gift and home decor sectors also showed a similar low increase, with online activity weakening while physical store purchases saw a slight uptick.

The strongest shopping day in the analyzed week was Monday, August 31, the last day before the school year commenced, indicating a consumer focus on back-to-school needs. However, the jewelry sector bucked the trend with an 8% rise in shopping volume, and average transaction values reaching 1,254 shekels. The cosmetics sector saw a significant 30% surge in online activity, with average online transactions at 327 shekels, compared to 112 shekels in physical stores, largely attributed to promotions.

Nadav Lachmani, CEO of Control at Phoenix Gamma, suggested that the public is still largely in a summer vacation mindset, postponing holiday preparations. He noted that the significant increase in food sector demand signals the beginning of holiday preparations and anticipates an acceleration in other consumer sectors related to hospitality, gifts, and home goods as Rosh Hashanah approaches.