Cold, expensive, getting more expensive - what happens to our shopping cart?

The intention of the large manufacturers and importers to raise prices is already affecting the price of our shopping basket, even though most of the price increases have not yet been reflected.

How does this happen and where is the cheapest basket?

All the details inside

Dr. Hezi Gur Mizrahi

26/01/2022

Wednesday, 26 January 2022, 08:40 Updated: 10:35

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Are you expensive at the checkout in the supermarket?

Wait - we have not seen anything yet - because the new price lists of the big importers and manufacturers, which have already announced their intention to raise prices, have not yet entered into force.

One opportunity has already been missed: while the "big" updated and expensive price lists are available for retailers, it was to be expected that small manufacturers or parallel importers would be pushed into the gap between the big factors 'intention to raise prices and the retail chains' desire to sell cheaply.

This was supposed to be the big time for the "little ones."

In practice this does not happen.

Why?

For two main reasons: The loyalty of the big chains to the larger manufacturers and importers has met the desire of the small manufacturers to enjoy the general rise in prices.

It is indeed bad for us, the consumers, but also no small self-goal for the sub-players in the market that none of them took the opportunity to grow, hoping to make the precious dinosaurs extinct ...

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The basket of products we examined, a comparison between the chains

Raising price "in small"

But wait, if the updated price lists (for the most part) are still not valid, then how is it that our basket is getting more expensive every week, at least in a sense?

There are two main reasons for this: during 2021 we saw a gradual rise in price that was not reflected in the price tag, due to the fear of public criticism, but through the cessation of quantity discounts and promotions.

So it turned out that we paid more at the checkout in the supermarket without the nominal price changing.

The second and more annoying parameter is the "small", almost imperceptible price increase of some of the brands that works in favor of manufacturers / importers and retailers alike: when the price increase takes effect, it will look smaller which will reduce criticism of the manufacturer or importer of the same brand. The retailer who knows that a new and more expensive price list will take effect in March, for example, when the massive shopping begins ahead of Passover (which will take place in mid-April), will make it harder for him not to absorb some of the costs, as this is the season

Therefore, a "small" price is already being raised - at the expense of potential absorption in the spring months.

All of these elements make our shopping cart more expensive, even though it has not yet become "officially" more expensive.

And yet, even in choosing from some expensive alternatives, there are more expensive and costly ones.

This week we again sampled products and brands that are about to become more expensive and found significant gaps between the various chains.

Almost 20% gap - the difference between the cheapest and most expensive chain (Photo: Daniel Malakhovsky)

Severe damage to the weaker layers

All we have left for now is to be smart consumers, save on unnecessary shopping, look for replacement products for brands whose prices are rising, try the private labels of the various chains, which are usually produced in the same production lines, only packaged differently, and most importantly hope until the real price rises. After we finish with the shopping for Passover), perhaps some of the reforms that the government proudly announced, regarding parallel imports, the abolition of standards and the reduction of protective caps, will yield fruit - literally.

It should be noted that rising prices mainly hurt the weaker sections and deepen social disparities.

how?

As income increases, so does the ability to demand from the employer a wage increase that will compensate for the general increase in price.

A relatively senior employee will not have difficulty receiving a small increase in relation to his salary, of NIS 500 per month, which will compensate him for the rising cost of living.

In contrast, a junior employee, usually an unprofessional employee, will find it difficult to compensate his family for the increase in prices.

He will have to cut down on expenses - and if he does not want to cut back on food, he will save elsewhere and his standard of living will be hurt.

This week we selected a basket of high-frequency products in our weekly shopping, and examined the gaps between chain and chain: which chain is currently fighting for its buyers and which chain might choose to try to increase the profit line along with suppliers.

Cheap is no longer available, just expensive and very expensive.

Our basket prices in the chains (Photo: Daniel Malakhovsky)

• Of money

• consumption

Tags

• Cost of living

• Price increase

• Importers

• supermarket