Pay more, buy less.
How much has our shopping basket become more expensive in the last three years? (Photo: ShutterStock)
When you look at the protests and the strength of emotions, for and against, that characterize the public debate surrounding what is developing into a constitutional crisis, one can only imagine what would have happened to our standard of living, if we had devoted the same degree of enthusiasm to the fight against the cost of living.
According to the CBS data for the month of February 2023, household expenses for food products, including vegetables and fruits, rose from 17.90% of total expenses to 18.30% and housing expenses jumped from a proportional share of 24.70% to 26% of all household income, according to the data , the average household's expenses for the year 2023 are 18,389 shekels per month, with almost half of them dedicated to food and housing alone. It should be
remembered that a household that brings in tens of thousands of shekels a month compared to a household that brings in a few thousand does not show a similar relationship in terms of spending percentages. A person who earns double does not need twice as much Therefore, as you go down in income level, you find that living expenses take up a significant percentage of it, while the more senior earners have free money for other expenses (for example, leisure and culture).
In a public opinion poll we conducted among 117 participants, we found that 92% of them said that they pay much more for food - but did not know how to answer exactly how much their expenses increased.
Some respondents reported a deliberate reduction in shopping due to a lack of money.
Our food basket shows a consistent rise in price over the past three years (Photo: Daniel Malachovski)
Despite this, it seems that the sentiment among the public is higher than the price increases themselves: we conducted a sample survey among the six leading marketing chains, with a diverse basket of 80 common products from the leaders in household consumption - and we checked what the average we paid each year, how much it became more expensive and where we paid more.
Compared to the shopping basket prices versus the average we paid in 2021, the prices increased by 8.50%.
This is a high price increase, but the public's feeling is that the prices have gone up "by dozens of percent" - and not it.
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The price gap of the food basket in the various chains over 3 years (Photo: Daniel Malachovski)
The price differences over the years between the cheap and the expensive chain (in the same sales segment, that is - not in comparison between a discount supermarket and a neighborhood grocery store) is about 10%.
The marketing chains did not only increase the prices following the demands of suppliers and manufacturers.
It turns out that the price increases occurred at a gradual rate even before the exposure and the various protests on the subject, when part of the reason why we pay more is the change in the pricing mix, fewer promotions or promotions with more complex conditions and restrictions for the consumer such as "buy and get".
This is an increase in price that is not reflected in the nominal price of the product on the shelf, but is clearly felt at the checkout.
The forecast, unfortunately, is not encouraging: prices will continue to rise, consumers may not remain indifferent, but they will not do enough to protest.
The war on the cost of living, unfortunately, has no headquarters.
Average basket prices each year, according to retail chain (Photo: Daniel Malachovski)
Based on the data of the CBS, the website of the Ministry of Economy, the Pricez and CHP system and the data of the Institute for Retail Research.
The author is the CEO of the Institute for Retail Research
Cost of living