Expensive for you?

It is worth remembering that every product has a substitute

The consumer relationship is a triangle: manufacturer or importer, retailer and consumer.

Even if production and import costs go up, there is no reason that of the three participants in the process, the only ones who will be harmed will be us.

Barn raises prices?

Here's a way to force it - and also the one who provides it with shelf space, start counting us

Dr. Hezi Gur Mizrahi

06/01/2022

Thursday, 06 January 2022, 15:39 Updated: 16:22

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The relationship between manufacturers and importers and retailers is simple: the manufacturer or importer has products, retailers have shelf space.

The shelf space, even though it is held by the retailer, i.e. the supermarket, is very expensive for the pocket of the manufacturer or importer, because each location in the store has a different value that influences our buying decisions.

There is meaning to the side (right or left), the height (at eye level, below or above it) as well as the location within the walking route (such as proximity to the fridge from which we will buy at every supermarket purchase) in the supermarket, which gives preference to a particular brand over its competitors.

It follows that if we want to fight the cost of living and the price increases that excite us, we should not fight alone but ask whoever says to be our partner in the struggle, i.e. the retailer, to make some effort for us.

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Rami Levy: Breakfast cereal Trix 480 grams Nestle NIS 15.

Multi-fruit breakfast cereal 420 grams Eshbol NIS 7.90 (Photo: ShutterStock)

While in the age of direct trade many manufacturers and importers are trying to approach the consumer directly through trade sites, to cut the retailer off the chain.

They are currently doing so in a step-forward and two-step format, so as not to provoke the wrath of retailers who might keep them off its shelves (and who are still responsible for most of their sales), but once the dam breaks, the flood will come.

In other words: the day will not be far off when they will enter the process of virtual sales arenas, some of which will not be operated by the retailer as they are today, but will be more related to the manufacturer or importer or the incorporation of some of them.

Social networks are vibrant with calls for a consumer boycott, but as long as it's a post we are all cohesive and purposeful, from the moment it should affect our daily routine and home things look different, how do we explain to our kids that instead of buying Osem breakfast cereal for 25 shekels we can buy a product An equivalent of the Eshbol company for NIS 10?

And regardless of the kids, sometimes it seems like we just are not willing to put in the effort to win the critical campaign.

Still, salvation may come to us precisely from the retail direction.

Market Pavilion: Peanut snack Bamba Osem NIS 4, Peanut snack Shasha Eshbol NIS 2.30 (Photo: ShutterStock)

The retailer is very sensitive to changes in our consumption habits. And the recent price hikes announced by Osem are a good example of this: Osem sent all retailers a new price list that will take effect in early February, the costs will be felt after the fog dissipates and we are busy with another affair - and the price hike will probably only be felt in March.

In any case, today we see that retailers are afraid to raise prices: note that almost all the price increases we experienced in the past year were not reflected in the change in the price tag on the product, but mainly in the cancellation of quantity discounts, promotions and more. But as soon as the price rises "officially", those who do not want to impose the increase on consumers, that is, on us, the new price, will have to harm its profitability.

And here we come into the picture, because there is no reason why retailers should not compete with us.

In fact, they are already competing: a few weeks ago it became known about the intention of a large manufacturer, a monopoly in its field, to raise prices.

A large retail chain has fought the veteran manufacturer and has meanwhile prevented the rise.

We would have been happy to elaborate further and pargan here to the retailer, but both the manufacturer and the retail chain are not interested in confirming the story, apparently due to the horror that fell on them following the Competition Authority investigation.

Shufersal Deal: 10-12 medium salt cucumbers Beit Hashita NIS 7.60, 10-12 medium salt cucumbers Yavne Group NIS 5.45 (Photo: ShutterStock)

The costs of manufacturers and importers have increased, but why should only we pay?

According to many manufacturers, the costs of raw materials rose sharply last year, and importers also received price lists from some overseas manufacturers that reflected a sharp rise in prices. In clear language: now it costs them more to produce or import. Understanding their profit margin, it can be assumed that it is tens of percent.The same is true for retailers: Most retail chains in Israel are public - and their appraisals reflect excellent profits.It

will be said immediately: However, it is not possible for the price of a particular product to rise so that the manufacturer or importer will continue to earn the exact same percentages on it, the retail chain will not hurt its profits either - and the only one who will pay the price is the consumer, that is, us.

There is in the neighborhood: spaghetti 500 grams barn 5 shekels, spaghetti private label 500 grams there is 2.90 shekels (Photo: ShutterStock)

Therefore, buying cheap substitutes will first of all hurt the expensive manufacturer or importer, it will also hurt, albeit cumulatively, the retailer: Suppose today he earns close to 25% on a product whose price to the consumer is 40 shekels.

That is - 10 shekels every time we put it in the cart.

Now suppose we are tired of being suckers - and not in a belligerent post on Facebook but through our shopping cart - so we chose the same product from a cheaper brand, which costs only 30 shekels.

The retailer's profit percentage remains the same, but the shekel profit is lower.

Over time, this forceps movement will play off both the manufacturer / importer and the retailer at a price we will be willing to pay.

Victory: couscous 350 grams barn NIS 7.50, couscous 350 grams Sugat NIS 4.90 (Photo: ShutterStock)

Teach children prudent consumption

So true, kids can make a face when we walk home from shopping with a non-Bamba peanut snack, or with a lesser-regarded ketchup than a barn, but hey - isn't this exactly an opportunity to teach them what smart and responsible consumption is and share them with our budget considerations?

After a few weeks, either the worried manufacturer will break, or the retailer experiencing a decline in profits will break - and even if it takes longer, there is a chance that in the meantime we will get used to the cheap brand, as we know - there are many products. But mostly image-based.

Mega in the city: Sugat Basmati rice 1 kg NIS 14.90, Basmati rice Mia 1 kg NIS 10.90 (Photo: ShutterStock)

So this time we have not assembled a full shopping basket, but we continue to present you with alternative brands to brands that have raised prices.

After all: if the prime minister has an alternate prime minister, why not have our cornflakes or ketchup as well?

Keep in mind that around every giant there are some small entities that are just waiting to grow, but find it difficult because agreements between large manufacturers or importers and retailers push them out of our line of sight, in every sense.

It's time to look for them in the supermarket, even if it means looking down at the lower shelves or carrying it upstairs, to the shelves that often go over our heads: the war on the cost of living starts there - and it's time to start taking matters into our own hands, before calling for social boycotts.

List of brands - and the alternative brands in the various marketing chains

Rami Levy

• Trix breakfast cereal 480 g Nestle NIS 15

• Multi-fruit breakfast cereal 420 g Eshbol NIS 7.90

• Bamba peanut snack NIS 4

• Shasha Eshbol peanut snack NIS 2.30

• Cucumbers in salt 10-12 Medium Beit Hashita NIS 7.60

• Cucumbers in 10-12 medium salt Yavneh group NIS 5.45

• Spaghetti 500 g barn NIS 5

• Spaghetti brand private 500 g has NIS 2.90

• Couscous 350 g barn NIS 7.50

• Couscous 350 g Sugat NIS 4.90

• Sugat basmati rice NIS 1 NIS 14.90

• Maya basmati rice NIS 1 NIS 10.90

• Soy sauce 600 ml Barn NIS 14.90

• Soy sauce 700 ml Master Chef NIS 9.90

• Colgate Red Gel Toothpaste 100 ml NIS 9.90

• Refreshing Aqua Fresh Toothpaste 100 ml NIS 5.45

• 200 gram bread crumbs NIS 5.90 Barn

• 200 gram bread crumbs NIS 3

• Waffle rolls filled Quarter to seven Elite 120 grams NIS 10

• Waffle rolls filled 24/7 Carmit / Rami Levy 160 grams NIS 6.67

• Of money

• consumption

Tags

• Cost of living

• Shufersal

• victory

• Mega in the city

• Rami Levi