Carrefour Prices Soar After 'Basket of the Nation' Initiative Ends
Translated & summarized from Ynet by baba
Carrefour has significantly increased prices on many of the 100 products previously included in Israel's "Basket of the Nation" initiative, which ended on October 14. Some items, like laundry gel, saw price hikes exceeding 224%. A review found 15 products more than doubled in price, while 70 others increased by up to 99%. The Ministry of Economy declared the initiative a success in lowering prices and fostering competition, but Carrefour cited profitability issues and supply chain problems for its withdrawal. The chain has launched a new promotion with fewer discounted items.
The story in 6 lines · by baba
- Carrefour prices surged dramatically, with one laundry gel increasing by 224.6% after the 'Basket of the Nation' ended.
- 15 of the 100 "Basket of the Nation" products saw prices more than double, and 70 others increased significantly.
- The Ministry of Economy claims the initiative successfully lowered prices and increased competition.
- Carrefour cited profitability erosion and supply issues for ending its participation in the program.
- Price variations were significant between different Carrefour Market branches.
- Experts are divided on the impact, with some predicting consumer frustration and others expecting continued loyalty.
Following the conclusion of the Israeli Ministry of Economy's "Basket of the Nation" initiative, the Carrefour supermarket chain has seen significant price increases on many of the 100 products that were part of the program. A dramatic example is a 2.5-liter bottle of Persil laundry gel, which jumped from NIS 12.6 to NIS 40.9, a 224.6% increase, at Carrefour Market stores in Tel Aviv, Hadera, and Petah Tikva.
A review of the 100 products revealed that 15 have increased in price by over 100%, while 70 saw increases between 21% and 99%. Only 13 products were reduced in price, and two saw increases of less than 20%. The initiative, which aimed to lower prices on basic consumer goods, apparently failed to create lasting competition, with prices returning to their previous levels or higher once it ended.
Price discrepancies were also noted between different Carrefour branches, particularly in Carrefour Market stores, where some items experienced unusually high price hikes. For instance, a 750ml bottle of olive oil saw a 7.1% increase in most stores but a 58% jump in others. Similarly, a 700g container of Sabra hummus increased by 19.7% in one branch but 70.3% in another.
The "Basket of the Nation" initiative, launched about a year ago, was Carrefour's sole participation in a government effort to lower consumer prices. Carrefour received significant marketing support, estimated at NIS 25 million, but ultimately decided not to continue the program due to high subsidy costs and criticism, despite attracting 72,000 new customers. The initiative officially ended on October 14, with new prices taking effect the next day.
The Ministry of Economy, led by Minister Nir Barkat, has insisted the program was a success, claiming it proved basic goods could be offered at significantly lower prices and stimulated competition. Carrefour initially supported the initiative, citing customer influx, but profitability erosion, supply chain difficulties, and consumer confusion over the limited store participation ultimately led to its discontinuation. Carrefour has since launched "Special Deal," offering discounts on a smaller selection of products.
Experts are divided on the impact. Consumer behavior expert Dr. Dana Tevet suggests some consumers may feel frustrated and seek lower prices elsewhere, while others accustomed to the chain's convenience will likely remain. Moti Azulai, CEO of Migdalor La'asakim, views the initiative as a populist failure, arguing Carrefour is caught in a bind due to import limitations and the need to show profitability before a potential IPO, forcing it back to 1990s-style promotions that may anger consumers amid rising living costs.
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