Consumables sales in Israel have had their best half year for a long time, thanks to the effects of the Covid-19 pandemic. Sales in the first half of 2020 totaled NIS 25 billion, representing growth of 9% in money terms, an additional NIS 2.08 billion in comparison with the first half of 2019. The pandemic, which led to the closure of Israel's skies and to restrictions on restaurants and cafés, also led to huge growth in sales of food and beverages and of toiletries.
Traditionally, the second half the year is generally the stronger for food sales in Israel, but sales in the first half of 2020 even exceeded those in the second half of 2019, by 7.2%, according to figures from Storenext.
Not only did sales rise; prices did too. Storenext's price index rose by nearly 1% over the first half year. A similar rise was recorded for June 2020 in comparison with June 2019.
In June as well, the fastest growing categories were those connected to more prolonged stays in the home and the diversion of expenditure on food to things consumable in the home environment. Sales, in financial terms, of food items grew by 9.4% in the first half of 2020 in comparison with the first half of 2019. Growth in real terms was 8.4%, the difference being accounted for by higher prices. Sales of products for the home grew by 13.3% in money terms, and by 12.1% in real terms.
Sales of beverages grew less, by just 3.6%, and prices were almost stable, rising by just 0.3%. The only category in which Storenext did not record a price rise between the first half of 2019 and the first half of 2020 was personal care products; sales of these rose 6.1% in money terms, while prices fell by 0.3%.
In the light of the restrictions on bars and restaurants, sales of alcoholic drinks are an interesting category. Sales of wine, beer, and spirits at the supermarket chains grew by 10% in the first half year, with growth of 7% in June alone.
On the other hand, sales of items such as chewing gum and snack bars, considered products "for the road", fell in the first half of this year.
In June, the growth trend seemed to come to a halt. Weekly sales fell in the last week of May to below NIS 1 billion, and continued to decline gradually in June, reaching NIS 924 million in the week beginning June 21. The decline led to supermarket chains coming out with loss-making bargains. In the last week of June, however, the rate of Covid-19 infection in Israel rose steeply, and the re-imposition of restrictions and the fear of a total lockdown led to panic buying at supermarket chains. In the week beginning June 28, sales were up by NIS 24 million over the previous week.
Even in the lowest weeks, sales were higher than the average for 2019. Israelis are unable to indulge their wont for travel abroad in the summer, so there are more mouths to feed at home.
Published by Globes, Israel business news - en.globes.co.il - on July 13, 2020
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