Food Prices Soar Fivefold During Government's Term, Contradicting Promises

The cost of food in Israel has risen nearly five times faster during the outgoing government's term compared to the previous four years, according to an analysis of a basket of 80 popular products. The study, conducted by Professor Itai Atter and doctoral student Adi Omer from Tel Aviv University's Faculty of Management, tracked prices from September 2018 to August 2026. The sharpest price increases were observed in neighborhood stores and online, where consumers often shop due to security escalations. In neighborhood stores, the food basket increased by 19.6% in the last four years, compared to only 4.3% in the preceding four years. Online prices rose by 19% versus 4.1%, and in discount stores, prices increased by 14.5% compared to 2.8% previously.

Shufersal led the retail price surge, with its prices in discount stores rising by approximately 22.7% in the recent period, compared to about 0.6% previously. Its neighborhood chain, Shufersal Sheli, saw prices increase by 19.6% versus 2.3%. Other chains also experienced significant hikes: Victory prices rose by about 16% in the last four years compared to 1.2% previously, and Rami Levy prices increased by 10.3% compared to 6.1% in the earlier period. Similar trends were seen online, with Shufersal Online prices jumping 24% and Victory Online by 18.6% in the recent period.

In absolute terms, the Shufersal Deal basket increased by 231 shekels in the current period, compared to a mere 6 shekels previously. Shufersal Sheli's basket rose by 222 shekels versus 26 shekels. Online, Shufersal's basket cost 247 shekels more, compared to just one shekel in the prior period. These increases occurred despite a strengthening shekel and a decrease in raw material and shipping costs over the past year.

Experts suggest that the lack of government intervention is a primary reason for the price hikes. Professor Atter stated that when the cost of living is not a government priority, companies exploit the opportunity to raise prices. Previous attempts to curb price increases in early 2022, by then Ministers of Finance and Economy Avigdor Lieberman and Orna Barbivai, were largely unsuccessful. A wave of price hikes occurred in late 2022, attributed to rising raw material and shipping costs, followed by a continuous series of significant increases from most suppliers.

The analysis also noted that Shufersal's new ownership under the Amir brothers removed the price alignment between online and discount store prices, making online purchases more expensive. Competitors followed suit, alongside the cancellation of reduced delivery fees and a subsequent 20% rise in delivery costs. The findings come just before another expected price increase following the end of the "Israel Basket" initiative led by Economy Minister Nir Barkat, after Carrefour declined to extend its 30% discount offer.