GROCERY PRICES OUT OF CONTROL: Israeli Shopping Basket Jumps 20% in Four Years, Chocolate Soars Nearly 78% as Cost of Living Crisis Deepens
The cost of everyday groceries in Israel has surged by as much as 20% over the past four years, with some basic products experiencing dramatically steeper increases, including a popular chocolate bar whose price has skyrocketed nearly 78%, according to a new Tel Aviv University study released Sunday.
The research, conducted by Professor Itai Ater and doctoral student Ad Omer of Tel Aviv University’s Faculty of Management, found that grocery price increases have accelerated sharply compared with the preceding four-year period. The rate of inflation in the basket of products examined was nearly five times higher than during the previous period.
The findings underscore the growing financial pressure on Israeli households, which are paying substantially more for many of the same products they purchased just a few years ago.
Researchers tracked a fixed basket of approximately 80 consumer products across roughly 700 stores belonging to Israel’s major supermarket chains. They compared prices during two consecutive four-year periods: September 2018 through August 2022, and September 2022 through August 2026.
The study examined average monthly prices after discounts, providing a comparison of what shoppers actually paid rather than relying solely on listed retail prices.
The products surveyed covered a broad range of household necessities, including dry groceries, dairy products, coffee, chocolate, baby food, fruits and vegetables, beverages and cleaning supplies.
The sharpest overall increases by shopping format were recorded at neighborhood grocery stores, where the cost of the basket rose 19.6% over the four-year period.
Online grocery shopping was nearly as expensive in terms of inflation, with prices climbing 19%, while discount supermarket chains recorded a more moderate, though still substantial, increase of 14.5%.
A breakdown by individual supermarket chain revealed significant differences in the extent of the price increases.
Shufersal Deal recorded the largest increase among the chains examined, with the cost of the surveyed basket rising 22.7%.
Shufersal Sheli and Freshmarket followed with increases of 19.6%, while Victory registered a 16% rise.
Rami Levy, widely associated with discount grocery shopping, recorded an increase of 10.3%, while Yochananof had the smallest increase among the chains listed, at 8.5%.
The differences indicate that consumers experienced considerably different levels of grocery inflation depending on where they shopped, even when purchasing the same basket of products.
Some individual items experienced increases far exceeding the overall average, with chocolate emerging as one of the most striking examples.
A 100-gram bar of Elite milk chocolate, popularly known in Israel as Parah chocolate, rose from an average of 5.21 shekels to 9.26 shekels in neighborhood stores.
That represents an increase of 77.9% in just four years.
Even at discount supermarkets, where prices generally remained lower, the same chocolate bar became 57.6% more expensive, climbing from 4.93 shekels to 7.77 shekels.
Other familiar grocery items also recorded significant increases.
A package of Maadanot cheese bourekas rose 30.9% in neighborhood stores, from 19.15 shekels to 25.07 shekels.
A 200-gram jar of Taster’s Choice coffee increased 26.1%, with its average price climbing from 31.40 shekels to 39.60 shekels.
Sug at jasmine rice, sold in one-kilogram packages, became 17.7% more expensive at discount supermarkets, rising from 9.72 shekels to 11.44 shekels.
That increase was particularly notable because the price of the same rice product had actually fallen 10.5% during the preceding four-year period.
The researchers identified several economic factors that may have contributed to the widespread price increases, including higher value-added tax, rising municipal property taxes and increased electricity and water costs.
These expenses can affect food manufacturers, distributors and retailers, potentially contributing to higher prices for consumers.
At the same time, the researchers pointed to the strengthening of the Israeli shekel as a factor that could help moderate price increases, particularly for imported products and raw materials purchased abroad.
Beyond the broader economic pressures, the study’s authors suggested that food companies have taken advantage of the limited attention being devoted to the cost-of-living crisis by the government and the public.
According to their assessment, the lack of sustained political and public scrutiny has created an environment in which manufacturers and retailers have been able to increase prices with relatively little resistance.
The findings also raise questions about the effectiveness of competition in Israel’s grocery market, given the substantial differences in price increases among supermarket chains.
For consumers, the cumulative effect is considerable. A shopping basket that cost 500 shekels four years ago would now cost approximately 600 shekels if its price increased by 20%, even though the shopper would be purchasing the same products.
For families making several substantial grocery purchases each month, those increases can translate into hundreds of additional shekels in household expenses.
{Matzav.com}
