Of money
consumption
Cost of living?
You will not believe what we found in the test
While there is talk in the background of a wave of rising prices, we set out to check on two fronts: Israel vs. Europe (hint: annoying) and Israel of Summer 2021 vs. Israel of Fall 2012, a year after the social protest that began as a consumer protest.
Spoiler: The results are amazing
Tags
Cost of living
Shufersal
social protest
Cottage protest
supermarket
Dr. Hezi Gur Mizrahi
Friday, 04 June 2021, 08:04 Updated: 08:28
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This summer we will mark a decade of the biggest consumer protest you have ever had in Israel, a consumer boycott that swept away hundreds of thousands of protesters, who joined the "cottage protest" and made suppliers and manufacturers understand the power of the consumer.
The cottage, the product that ignited the protest at the time, was merely a symbol of the basic product of Eretz Israel, which almost every Israeli family purchases on a daily basis.
Before we go to check what is happening between the supermarket shelves, let's go on a short journey in the time tunnel: the protest began as soon as it was revealed in the social authority that the product was out of government control and increased by almost 50% - just below the consumer radar.
The sequel is almost history, but the lesson from that protest, which made the big manufacturers sweat, was that the Israeli consumer realized that he had power, that in the multiplication of social networks that can turn one angry post as effective as a huge sponsored campaign, could produce an effective protest.
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To the full article
A sweet comparison that illuminates a bitter taste (Photo: Daniel Malakhovsky)
The axioms of the cost of living
So what has happened in the last decade on supermarket shelves in Israel? Have prices risen in relation to the growth of the home economy or is there a different phenomenon here? And are people in Europe paying less? And of course - what does the consumer future hold for us and how much more will we pay in the near future, if at all, for the same basket we consume every week?
Recently we have been reporting price increases in almost all areas of domestic consumption, rising raw material prices, problems discovered in international shipping and considered corona side effects, continue to worsen and also contribute to rising product prices, and it seems that uncertainty or perhaps the desire to align with some Who dared to raise a price, pulls the rest of the big players in the market in a direction that will hit the pocket of us all.
When we come across a supermarket in a product whose price has gone up, we rush to point the finger of blame at the owner, i.e. the retail chain where we buy, but there is a long chain here that started long before the product hit the shelf.
Raw materials traded on the global stock exchange, such as sugar, wheat, oil, corn, soy and others, are basic ingredients in most of the products we consume, and shortages caused by global causes, from natural to man-made, sometimes create shortages, a gap between growing demand and limited supply and increases. Prices that are not really related to the supermarket owner.
How many tablespoons of sugar are in a glass of sugary drink, have you ever checked? It is clear that the price - from concentrates through juices to fizzy drinks, will be affected by a drastic change in the price of sugar. And not only sugar or oil for example are the influencers, but also the raw materials for the product packaging, for example paper and plastic which are raw materials for most of the product packaging we purchase.
It is important to mention that despite the fluctuations in the stock market in the prices of raw materials, most manufacturers do not purchase them on a daily basis but in annual transactions (and at least, quarterly), so fluctuations in price and discount do not always affect the supermarket price, but only over time.
A more expensive Israeli child, even in pampering (Photo: Daniel Malachovsky)
This is not Europe
One of the axioms among consumers in Israel is that the supermarkets here are the most expensive in the world.
We checked the sales sites of the leading chains in Europe (with an emphasis on ALDI in Germany) and compared the prices with Shufersal, the leading chain in Israel in terms of the volume of shopping there and is a sign of market prices.
We examined a number of identical, parallel or equivalent products to the products we encounter above our shelves and in some we did see significant gaps between the Israeli basket and the European basket, but not in all segments.
In addition, it is important to note that consumption patterns are different in each country and therefore the dominant products in the shopping basket in Israel are not the same as baskets in other countries.
Even with the average purchase volume, there is a significant difference: Israelis like to buy more.
These may be cultural differences of departure from a mentality of scarcity to a mentality of abundance, but the cultural-consumer difference is evident in quite a few aspects, some of which are surprising.
For example, a package of toilet paper rolls containing 48 rolls. If it is at a decent price many customers will load it on the cart without thinking twice, while in other countries they will purchase toilet paper packages of only 4 rolls. There have been several attempts in the past to introduce small packages to the Israeli market at an affordable price and the operation was unsuccessful and failed to educate the customer that you can buy toilet paper with every purchase, as you buy milk or eggs - for consumption in the coming days only. The Israeli consumer, although his home real estate is usually limited and expensive, still prefers his toilet paper in huge packages.
Moreover, although we talk about the cost of living and rising prices of products and gaps compared to the world, there are cases where we have been exposed to significantly reduced international products and brands. Products from the worlds of cleaning and care that penetrated the local markets in parallel imports, and provided a significantly cheaper solution, an action that led to a reduction on the part of the official importer who realized that sometimes the celebration ends.
And yet, as you can see from the following comparative data, there are products where the price difference is huge.
If there is no flour, fly to Germany (Photo: Daniel Malachowski)
The price of olive oil in the land of olives, compared to the price of the same product in a country where olive trees are seen only in pictures.
Inconceivable (Photo: Daniel Malakhovsky)
The creativity of the price increase
So what is going to happen in the market in the coming weeks? In recent days, we have been exposed to quite a bit of information about the intention of importers to raise prices. Increases ranging from 5% - 25% and directly affect the consumer's household expenses.
The price increase is sometimes a bit cunning and is not always presented directly to the consumer, but is done gradually, sometimes even without a change in the official price at all! How can you raise a price without changing it?
Here is an example: if the price of a product per unit is NIS 6.90, but it is found most days of the year in various promotions that make the actual price NIS 5.45, for example 2 units at NIS 10.90 or even less: 3 units at NIS 15 before raising its price, just blink The promotions. Thus in effect a significant increase in price was made without touching the official price tag of each unit. The product.
The second stage - which has already begun these days - is broad pricing in consumer product prices, sometimes it seems like something small and insignificant, shekel here or shekel there, but changing the price of a product from a price of 4.90 to 5.90 shekels is a price increase of 20%.
It is true that on paper this is the difference that most of us will not feel in a given purchase, but weigh here and shekel there - and as usual, when we receive the monthly charge from the credit company, we will not understand how it was so high when spending per second in the supermarket soared, say , This is already the monthly cost of a class for a child in the community center.
So true, here it is not Europe, as the song article, but not always the difference is so significant, as we tend to point out whenever a serious gap is discovered in one specific product or another.
So the only golden advice we can give is just to be alert to even slight changes in promotions and prices, always try and check out a similar alternative product and remember that in the end the supermarket also has a competing supermarket, maybe some of the promotions have not been canceled yet?
Sugar or "sugar"?
Depends on how much you paid per kilo (Photo: Daniel Malachovsky)
The table does not lie
And now, while we were grumbling, we made a comparison of the same basket over about ten years.
Spring-summer 2021 prices in supermarkets are not (in general of course) higher than 2012 prices, only a year after the social protest (based on data from the publication of Shufersal prices on 31/10/12 against the correct prices for 2/6/2021).
We were surprised to find that the common basket did not skyrocket in costs and in a comparative test against 2012 data, the year after that social protest, which rolled from the cottage fridge into the streets, it turns out the cost of living is not as bad as we feel, and there are even a large number of products.
The author, Dr. Hezi Gur Mizrahi, is the CEO of the Israel Retail Institute
Price comparison: the price today against the prices in the year after the big social protest (Photo: Daniel Malakhovsky)
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