Still Expensive: The Sector Where the Dollar’s Drop Is Reaching Consumers

As the dollar has plunged, there is one sector where significant price drops are being felt: household appliances. Prices of products including iPhones, air conditioners, headphones and ovens have fallen by tens of percent, largely because consumers have become more cautious and are postponing purchases, while competition has intensified. Still, experts are tempering the optimism, saying not all of the savings are passed on to the consumer.

In the food, fashion and car sectors, Israeli consumers are still waiting to see the weaker dollar reflected in their bills. In household appliances, however, the picture is different. Although many products became more expensive over the past year, a significant share recorded sharp price declines, showing that competition can allow currency movements to reach the final consumer.

For other reports in the “Still Expensive” series: “The drop in the dollar should have led to a 7% reduction in fashion prices”; “A car for 10% to 35% less: the price cuts that are not reaching us”; “The dollar fell, supermarket prices did not, where did our savings go?”

Gal Margalit, VP of marketing at the Victory retail chain, gave examples of these price cuts. “The price of a Dreame autonomous vacuum cleaner fell by 600 shekels,” Margalit said. “Samsung televisions fell by about 200 shekels per unit, and iPhone prices fell by between 15% and 20%.”

At the Electric Warehouses chain, they say they increased imports from 1,000 containers to 3,000 thanks to the low exchange rate. Liron Katz, the chain’s vice president, explained that part of the savings is being passed on to consumers. At the same time, Ilan Ben Arush of Mister Electric said the Israeli consumer has become more cautious and is delaying purchases. “When there is less demand, price becomes the main tool for attracting customers,” Ben Arush explained.

Competition in the sector has also expanded to the major food chains, which have begun offering electrical appliances at attractive prices to draw customers. According to Margalit, about 5% of shoppers at food chains also add an electrical appliance to their cart, compared with just 1% in the past. This trend is forcing specialized chains to compete for consumers through price as well.

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Not all products got cheaper An analysis by the price comparison site Zap reveals a more complex market picture. Sharp declines were recorded in the prices of headphones, smart vacuum cleaners, mixers, ovens and air conditioners. On the other hand, other products saw significant price increases: microwave ovens rose by 26%, fans by 15%, dryers by 9% and dishwashers by 5%.

Industry experts say not all of the currency decline reaches customers. Elad Barshan, an expert in customs and international shipping, pointed to a company whose sales rose by 10% while net profit jumped by 68%. “We are seeing the drops, but not all of them are passed on to the consumer,” Barshan said. Katz added that higher operating and shipping costs prevent the weaker dollar from being fully reflected in the final price.

The electrical appliances sector appears to be one that shows how a cheaper currency can reach consumers’ pockets. However, as long as the dollar remains low, it remains to be seen whether competition will intensify and the declines deepen, or whether this is only a one-time reduction.

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