Since February 2009, the price of an identical basket of products has risen by 23%, a rise that is out of line with the Consumer Prices Index, which has risen by less than 10% in the same period.
In May 2011, "Globes" reported that the price of a basket of products in the supermarkets had risen 8% within three months. This proved to be the park that ignited the cottage cheese protest and the outcry against the cost of living in Israel, which led to a boycott of Tnuva products, a boycott of Shufersal Ltd. (TASE:SAE), and other protest action over the summer.
Summer passed, and now it remains to see whether the protest actually affected supermarket prices. Via the www.pricesal.co.il website, we set out to check the prices of the same 30 products we had been monitoring. We found a rise of 2% in the seven months since last May.
The interesting thing is that, in comparison with February 2011, there has been a 12% rise in a year, mostly in the first half of last year.
Did the social protest put the brakes on price rises? It's impossible to know for sure, but given the constant rise in prices beforehand, it is reasonable to suppose that without the protest, we would now be reporting on much steeper rises in recent months.
Between February 2009 and February 2010, the price of the basket rose just 2%, which was clearly symptomatic of the economic slowdown in that period. However, from 2010 to 2011, it rose by 8%, and from 2011 to 2012 by 12%.
The basket contains 30 products in various categories.
According to a survey by Geocartography co-CEO Prof. Avi Degani, 45% of Israelis have changed their consumption habits in recent months, with most of them (38% of the total number surveyed) attributing this to the social protests of the summer. The change has occurred not only among low-income consumers; 28% of households in the top 10% of incomes report a similar trend.
Two-thirds of those surveyed say that they now re-examine the true value of every brand and whether it is worth paying the asking price for it. Prof. Degani terms this phenomenon "brand restart", with each brand having to justify its price anew, because the "new consumer" consciously suppresses the desire to buy prestigious brands, aware that there is no reason to buy them at any price.
Published by Globes [online], Israel business news - www.globes-online.com - on January 18, 2012
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