Israeli Consumers Spend Less as Fashion Retailers Offer Deep Discounts

Rising living costs are significantly impacting Israeli consumer habits, with a new study revealing a trend of more transactions but lower overall spending, particularly in non-essential sectors like fashion.

Research by fintech company Hyp, analyzing purchasing data leading up to the Jewish High Holidays, found that the number of transactions increased by 2.3% compared to the previous year. However, the total purchase volume dropped by 6%, and the average transaction amount decreased by 8%.

The fashion and footwear sector saw a more pronounced decline. Transaction numbers fell by 4.4%, while purchase volume decreased by 10.8%. The average spending per transaction in this sector dropped by 6.7%, from 297 shekels to 277 shekels.

In response to these trends, fashion retailers are implementing significant price reductions. For instance, the Israeli fashion chain Tamnoon, established in 1993 and now operating numerous branches with around 1,000 employees, has launched a special promotion. This includes offering girls' blouses for 15 shekels, down from 30 shekels, and other children's clothing items at similarly reduced prices.

Other sectors also experienced downturns. Cosmetics and jewelry saw a 16.1% decrease in transaction numbers and a nearly 25% drop in purchase volume, with the average transaction amount falling by 10.6% from 265 to 237 shekels. Analysts suggest this may indicate a consumer preference for essential holiday expenses like food and hosting over non-essential purchases, though the data alone doesn't confirm a long-term shift in consumption habits.