September 6, 2011

Are Israeli Retailers Afraid to Raise Price in Aftermath of Consumer Revolution

Tel Aviv…Israeli retailers appear to be gun-shy, holding back on raising prices in the aftermath of the social protest that caused cottage cheese prices to plummet. As a result, reports the Central Bureau of Statistics, food sales by supermarket chains fell by a seasonally-adjusted 7% (at constant prices) in July 2011, compared with June. The Sales Value of Chain Stores Goods Index fell 2% at constant prices in July from June.  Israeli sources tell KosherToday that the social consumer movement is putting the “fear of G-d” into retailers as they contemplate seasonally adjusted prices in advance of Rosh Hashanah. The sources say that the cottage cheese protest may not be a fluke and that the social movement, largely through such social media as Facebook and Twitter, may be here to stay, sending shivers down the spines of Israeli retailers. Several bloggers are routinely comparing prices and flagging price increases and occasionally concede price increases when they are in line with prices in other parts of the world. The retailers may well have to accept a new day where consumers scrutinize price increases as either being appropriate or unfair.  Remarkably, say the sources, retailers are beginning to realize that their control over prices may well have to be shared with the new social movement.