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Is the dollar plummeting - on the way to price reductions? "Consumer goods can go down" | Israel Hayom

2023-11-29T14:47:56.446Z

Highlights: Since the outbreak of the Iron Sword War, there have been many price increases in the field of food products. In the meantime, the dollar dropped significantly from about NIS 4 to NIS 3.68. Chain owners are quick to cool enthusiasm: "These things don't happen immediately" "It's enough for someone to buy with a low dollar and lower the price, and that will affect the market and fall in line," says Good Pharm CEO Adam Friedler. "This is a trend that develops over time and it can take three or four months," he adds.


Expecting relief in the pocket: Since the outbreak of the war, the Israeli consumer has also had to absorb an increase in food prices, but the drastic decline in the US currency signals hope that the trend is on the way to change • Chain owners are quick to cool enthusiasm: "These things don't happen immediately"


The war for the pocket: It is no secret, of course, that since the outbreak of the Iron Sword War, there have been many price increases in the field of food products.

Those who visited the branches often found more expensive prices and far fewer promotions. In the meantime, the dollar dropped significantly from about NIS 4 to NIS 3.68. This is a significant decline that should have an impact on price reductions.

Adam Friedler, CEO of Good Pharm, commented on the question of whether prices will be lowered due to the declining dollar: "The decline of the dollar could affect the reduction of imported consumer goods such as food and toiletries. However, these things do not happen immediately. This is because suppliers sit on inventory and many of them are fenced off for a period. In general, this is a trend that develops over time and it can take three or four months."

Dollar against shekel, photo: GettyImages

Asked if he thinks the price will actually be lowered, Friedler replied, "The market is competitive. It's enough for someone to buy with a low dollar and lower the price, and that will affect the market and fall in line."

In terms of the expected decline, he said: "There are many effects on the price of the product beyond the costs of the product, such as operating and transportation costs. Prices for food and toiletries can drop by single digits."

Another food chain source said, "When the dollar went up during the holiday season, we didn't raise prices and subsidized the increase. We knew what was happening to consumers in terms of high interest rates and difficulties. Some vendors do hedging. It's possible that some absorbed and didn't raise even though the dollar went up, so they may not lower."

Rise for the purpose of descent?

According to data recently published by the Ministry of Economy, there was an average increase of about 2.6 percent in all chains after the outbreak of the war and of 2 percent in the ten large chains, compared with the July-September average. This is an economic snapshot of the Ministry of Economy on the subject: the Israeli economy and the business sector in an iron sword war.

According to the same data, the main categories with an increase in prices are: diapers, with an increase of 5.6% on average; olive oil, with an increase of 4.9%; fish, with an increase of 4.2% on average; chicken, with an increase of 4.1%; water, with an increase of 3.1% on average; canned tuna, with an increase of 2.7%; pasta, with an increase of 2.5%; and fresh vegetables, with an increase of 2.2%.

Shopping cart at the supermarket, photo: Yehoshua Yosef

At the same time, November saw a 4.4% increase in spending on food chains compared to last year.

Another source in the food chain industry commented on the data: "In practice, I don't believe that there was a chain that wanted to raise prices because of the war period, but some of the prices were updated by the suppliers. For example, the issue of vegetables was burning, and all the retailers lost millions of shekels to sell at more or less the same price. Retailers haven't changed prices. What is more, there were promotions that ended and promotions entered on other products.

"When the operation ends, the prices return to what they were before the operation. I hope there wasn't anyone who knowingly decided to raise the price and take advantage of the crisis to enrich his coffers."

Asked whether there will be products that will become more expensive, he replied: "The currency exchange rate has fallen and demand has returned to normal. We negotiate with suppliers to postpone where it is critical.

"I can't identify anything specific that will get more expensive. This is a sensitive and delicate war situation. We live in a country where every hour there is news and many things can change, such as war, interest rates and more. It's not something you can predict."

"Show responsibility"

Another source said, "It must be remembered that the war period began on 8 October, and all importer and Tishrei operations were up to the same date. Then there were regular operations. Every year, the day after Simchat Torah, the operations are less profound than during the High Holidays, from Rosh Hashanah to Simchat Torah. This is the reason for the change and scope in the depth of operations. It's not like they say, come on, there's a war, so we'll raise the price by 2%.

Evacuation by helicopter during an iron sword war, photo: AP

"If we look at the different categories, each category has a different explanation. The price of olive oil worldwide has risen by more than 100%. To this must be added the currency rate of the euro that has risen, since olive oil is brought from countries such as Spain, Greece and Turkey. An increase of about 4% in the olive oil sector is minor relative to the need. As for poultry, in the first week of the war there were no birds because many slaughterhouses were not operating. When there is no department, it is impossible to do an operation.

The increase in diaper prices aligns with the High Holidays, in terms of the deep deals that were during the holidays. As for fruits and vegetables, I can say that the largest retailers in Israel showed responsibility and did not roll over the increase in prices of vegetables to the consumer. As evidence, we saw that in the free markets the prices of tomatoes, cucumbers and peppers reached NIS 15, and in the chains it did not exceed NIS 7.9-6.9. This is a direct result of disclosure of responsibility, so that the consumer will not feel that he can hardly find goods in those days and also pays a high price."

Asked whether a price increase is expected, he replied, "If there are importers who thought about making changes in prices after the war, because of changes in costs, it is possible that currency weakness will delay this process and we will see a completely different trend here."

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Source: israelhayom

All news articles on 2023-11-29

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