Buying Less: A Decline in Israelis' Spending Ahead of the Holidays - Walla! money

The drop in our holiday spending even reached the supermarket/ShutterStock

The Israeli public is buying less: Phoenix Gamma (Gamma Management and Clearing) reports a decline in credit card purchases in recent days ahead of the holiday, compared to the same period last year.

It turns out that the economic slowdown has reached the holy of holies of Israeli consumerism – shopping for the holidays and even the most stable segment among them, food shopping for the Rosh Hashanah meal.

An in-depth analysis conducted during the week of preparations for Rosh Hashanah, compared to the same period last year, showed declines in credit card purchase volumes, average purchase amounts, and the number of transactions in most trade and service sectors in Israel.

Although according to data published by Shva (Automatic Bank Services), on the eve of the holiday there was an increase of 7.5% in Israelis' spending on credit cards, compared to the eve of last year's holiday, even this one-day increase does not violate what appears to be a decline in private consumption.

Ariel Ganot, CEO of Phoenix Gamma/Yaron Walzer

An analysis of credit card transactions in the Israeli economy in recent days shows that in fashion, clothing and footwear, there was a decline of 21% in shopping turnover, in the electrical and electronic products sector a decline of 29.4% in shopping turnover, and in the hotel sector – a decline of 24% in shopping turnover. Further declines were observed in the tourism and travel industries, restaurants and cafes, food, and gifts for the home.

Part of the decline can be explained by the accelerated shift to online orders for products in the fashion and electronics sectors, but this alone does not explain the entire decline – especially since online shopping on international websites harms the livelihood of those engaged in the field in Israel.

Moreover, when examining the tourism sector, as can be seen in the data below, we find a corresponding decline both in hotels and guest houses in Israel and in tourism and travel abroad. In other words, the public did not replace hotels in Eilat with those in Crete, but cut back on its vacation expenses in general.

Ariel Ganot, CEO of Phoenix Gama: "I assume that the increase in the interest rate in recent months, joined by the increase in the dollar exchange rate and the jump in the cost of rent and mortgages, led the public to tighten its belt ahead of the New Year. We hear from business owners about declining consumption. It can also be seen that the Rosh Hashanah campaigns advertised by the chains did not bring relief to the various branches of commerce. The retail industry must work harder to maintain profitability."

More in Walla!

A short visit to the pool changed my life - and so can you

In association with TI SWIM

Shop less in stores, eat less at restaurants and go on vacations less. The Israeli public has begun to tighten its belt/ShutterStock

Industries in which there was a decline in shopping volumes:

Fashion and footwear – a decrease of 21% in shopping turnover, the average purchase decreased by only 1.8%. This shows a drastic decrease in the number of shoppers in stores and fashion chains.

Electrical and electronic products – a decrease of 29.4% in shopping volume, average purchases decreased by 8%, and in the number of transactions – a decrease of 23%.

Hotels and guest houses – a 24% decrease in shopping turnover. The average purchase declined by 7.4%, representing an 18% decrease in the number of transactions.

In the parallel industry – tourism and travel – a decline of about 17% in shopping turnover, the amount of purchases decreased by about 7%. And the number of tourists and travelers has decreased by about 11%.

Restaurants and cafes – a decrease of about 13% in restaurant turnover throughout the country, the average amount of expenditure decreased by 11%. The number of transactions declined by about 8%, when calculating the increase in the prices of groceries that rose and the inputs that jumped, it can be concluded that the restaurant industry earned much less money during this period compared to the same period last year.

The food sector – a decline of about 5% in shopping turnover. The average purchase price decreased by a similar percentage.
In the field of household goods and gifts – a decrease of about 14% in shopping turnover compared to last year.
Comparison made between September 4-11, 9 and September 23-12, 19

Phoenix Gammahas been specializing in providing one-stop-shop credit solutions to businesses for over 9 years. The company provides services to about 22,24 businesses and leading chains in Israel nationwide, in a number of areas of activity - credit card clearing as a consortium and discounting credit card vouchers, business loans, state-guaranteed loans, financing against real estate assets, financing against relays, factoring, import financing and equipment and guarantees for businesses.

• More on the subject:
• Credit Cards
• Expense
• New Year