Israelis Cut Back on Supermarket Purchases Amid Rising Living Costs

Israeli consumers are reducing their supermarket purchases as the impact of rising living costs continues to affect household budgets. Data from StoreNext reveals that in the second quarter of 2024, the quantity of consumer goods bought declined, particularly in the food sector. While nominal sales in the consumer goods market fell by 1.5% compared to the same quarter last year, the real volume of products purchased, after adjusting for price increases, dropped by 3.6%. The food category saw a 3.8% decrease in real purchase volume despite a 2.4% rise in food prices, indicating shoppers are buying fewer items even as prices climb.

Industry experts attribute this trend to increased price sensitivity among consumers, who are spending more time comparing prices, seeking discounts, and switching to cheaper or private-label brands. In response, retail chains have expanded aggressive discount campaigns, extending promotions beyond food to include electronics, smartphones, and even vehicles, aiming to boost customer traffic and basket size.

Despite the drop in product quantities sold, total revenue in the first half of 2024 rose by 4.7% to approximately 32.6 billion shekels, mainly due to inflation, holiday seasons, and shifts in consumption patterns influenced by the ongoing conflict. Analysts predict that as long as living costs remain high, consumers will continue cautious shopping behaviors focused on savings. Globally, major food companies are also preparing for potential demand slowdowns by implementing efficiency measures to adapt to changing consumption habits.