Israel's 'Basket of Goods' Pilot Ends, Future Decision to Next Government

The initial phase of "Israel's Basket of Goods" initiative, designed to lower consumer prices by leveraging collective purchasing power, will conclude on October 14th after six months of operation. The pilot program, which involved selling a basket of 112 products online and in 54 Carrefour stores, aimed to increase competition and reduce prices without direct government oversight. Preliminary data indicates that a government investment of NIS 25 million resulted in an estimated NIS 40 million in direct savings for consumers purchasing from Carrefour. Indirect savings of tens of millions of shekels were also observed from purchases at other competing supermarket chains.

During the pilot, the price difference between the Carrefour basket and the average price at other tested chains was approximately 32.5%. Prices for comparable baskets at leading chains dropped by 8.4%, compared to a mere 3% decrease in overall consumer goods across those same chains during the same period. This suggests the initiative had a noticeable impact on prices, particularly for the selected basket items.

Minister of Economy and Industry Nir Barkat has decided not to proceed with a second operational phase, deferring the decision on the initiative's future to the incoming government. Barkat stated that he would not make a binding decision for the next government during a period of transition, preferring to provide them with all the data to evaluate continuation, expansion, or a new model.

Michal Fink, head of strategy and policy at the Ministry of Economy, noted that the pilot demonstrated the potential of concentrating consumer demand to create a cheaper shopping basket. However, she also highlighted the difficulty in sustaining prolonged, aggressive price competition among major players in the food and retail market. Barkat added that while the project proved government-market cooperation can save households money, it also exposed a lack of competition, evidenced by only one major chain participating.

Barkat praised Carrefour's decision to join the initiative and significantly reduce prices, noting it followed discussions with the company's management. The findings and conclusions will be transferred to the next government. The Ministry of Economy and Industry will compile a final report detailing sales data, household participation, cumulative savings, price developments, project costs, and lessons learned, serving as a professional basis for the next government's decision.