A survey by the Center for Consumer Research for "Globes" has found huge difference in prices for the same basket of goods at different supermarkets in different cities, as well as between the same chain in different cities. The survey examined 28 products in different categories. All the purchases were handed over to charities.
For example, products bought at a Rami Levy Chain Stores Hashikma Marketing 2006 Ltd. (TASE:RMLI) supermarket in Ashdod for NIS 344 cost NIS 497 at the Alon Holdings Blue Square - Israel Ltd. (NYSE: BSI; TASE: BSI) Mega Bull supermarket in Talpiot in Jerusalem.
The survey of supermarkets in five locations - Talpiot in Jerusalem, Petah Tikva, Ashdod, the Admiralty in Haifa, and Beersheva - found a 30% difference in the price of the same basket of goods.
Rami Levy was consistently cheaper than Mega Bull in every location. Independent retailers - Kimat Hinam Ltd., Mahsanei Hashuk Ltd., and Osher Ad Ltd. - were usually the cheapest retailers. Shufersal Ltd. (TASE:SAE) discount chain Shufersal Deal was in the middle.
"The strengthening of the independent chains at the expense of the big chains stands out, reflected by the opening of new supermarkets and the strengthening of existing stores," says Center for Consumer Research CEO David Idan. "Consumers benefit. Instead of two chains controlling more than two-thirds of the market and setting prices, the small chains are dictating prices and pulling the entire retail industry down."
The survey was conducted before the start of the Passover holiday sales, which will intensify competition and the frequency of price changes in the coming weeks. The basket of products were the lead products in each category: Coca-Cola, frozen sole, frozen cod fillets, chocolate bars, frozen green beans, jam, milk chocolate, house brand cakes, Vitaminchik beverage concentrate, basmati rice, chicken soup powder, Tirosh kiddush wine, Materna infant formula, fresh tomatoes, cucumbers, carrots, and onions, toothpaste, grease remover, Sano Clear stain remover, liquid Ajax, and floor cleaner.
"Ashdod is the cheapest area because of the entry of Rami Levy and Osher Ad to the city," says Idan. "Last year, there was intense competition at the Ayalon and Admiralty compounds in Haifa. Beersheva will be the next area to see heightened competition, following the recent opening of an Osher Ad supermarket and the pending opening of a Rami Levy supermarket."
Rami Levy CEO Rami Levy said, "I expect the opening of Rami Levy in Beersheva to bring prices down 10-15% at competitors, just as happened at the other locations where I opened." His eponymous chain now has 24 supermarkets from Tiberias in the north to Beersheva (pending) in the south, and it will open a store in Kfar Saba later this year.
Price comparisons for the same basket of goods between retailers:
- Ashdod: Rami Levy - NIS 344; Mega Bull - NIS 454.
- Haifa: Rami Levy - NIS 385; Mega Bull - NIS 482; Shufersal Deal - NIS 448.
- Beersheva: Mahsanei Hashuk - NIS 422; Osher Ad - NIS 428; Mega Bull - NIS 490.
- Jerusalem: Rami Levy - NIS 405; Mega Bull - NIS 495; Shufersal Deal - NIS 465.
Same stores can cost double for the same goods
Prices at different stores of the same retailer can cost more than double for the same goods. Some examples:
- Ajax at Osher Ad in Ashdod costs NIS 18.75, compared with NIS 24 in Beersheva.
- Ashdod was cheaper than Beersheva for almost all products. A bottle of Carmel Selected Merlot costs NIS 18.95 in Ashdod, compared with NIS 34.30 in Beersheva, and Elite chocolate costs NIS 15 in Ashdod and NIS 23 in Beersheva.
- Prices at Rami Levy stores in Ashdod are 16% less than in Jerusalem. Levy says, "Prices are the same at stores for 92% of products. Prices for 8% of goods vary, depending on sales campaigns and discounts to match competitors' prices at specific locations. The product mix varies accordingly."
- Prices at Mega Bull are 10% less in Ashdod than in Jerusalem. The company declined to comment.
- Shufersal: 1 kg bags of onions and carrots cost NIS 4 in Petah Tikva, NIS 3 at Talpiot in Jerusalem, NIS 2 in Haifa, and NIS 0.80 in Ashdod. Shufersal said, "Prices for fresh produce are set daily, depending on the changing environment."
Published by Globes [online], Israel business news - www.globes-online.com - on March 14, 2012
© Copyright of Globes Publisher Itonut (1983) Ltd. 2012