March 23, 2015

Israelis Find Relief this Passover with Many Lower Prices

New York — Although the cost of living was a major issue in the recent Israeli elections, Israelis already were reaping the benefits of lower food prices. Sources in Israel told Kosher Today that food prices had dropped some 5% since the last Passover when Israeli shoppers complained bitterly about higher prices. The lower prices in the last 12 months mark the first time in more than a decade that Israelis have seen lower prices.

Israel’s food industry had succumbed to the reality that Israeli shoppers were shunning more expensive items and that they were buying necessity items in smaller quantities. They apparently have less disposable income, having been hammered by two increases in the value-added tax to 18%, rising home prices, higher municipal taxes and more. They don’t have extra cash to pay for pricier food. In the past year, Israelis found more discounts and promotions at supermarkets than ever before. But the bottom line, say industry sources, is that prices of items like poultry, cheese and wine this Passover will either be less than last year or at last year’s price levels.

Israel’s food producers also passed along savings from lower world commodity prices for items like sugar, wheat, soya and corn. The decline in spending by Israelis has had a devastating effect on Israel’s largest supermarket chains with Supersol posting a $42.8 million operating loss for 2014 while other chains also reported major losses.

Israeli sources say that a stronger dollar has also created a more favorable trade environment for American kosher food producers that export to Israel. Last year Passover the dollar traded at approximately NIS 3.45 while last week the dollar strengthened to NIS 4.03, giving the Americans a more favorable position vs. Israeli foods and greatly helping Americans living in Israel.