Israeli Supermarkets Watching Market Moves Closely

Israeli Supermarket

Supermarkets in Israel are on edge after a recent market survey. According to Nielsen data obtained by the Israeli business daily Globes, sales by Shufersal, Mega, and Coop Israel has dropped by 3.2% from January 2013 to January 2014.

With population growth taken into consideration, the volume of sales has decreased by 3.7%.

In financial terms, the figures are worrisome in comparison to the decrease in fast moving consumer goods (FMCG for short), which fell by 1% and the decrease in volume of sales by 1.8% with the corresponding month. While sales of food and beverage have decreased by 1%, sales of cleaning supplies and personal care goods have risen by 1.9%.

Meat sold over the deli counters, fruits, vegetables, and many non-food items were not listed under the FMCG category. The Nielsen data speculates that the drop in sales may have been greater as a result.

Aggregate market sales have also dropped from NIS 3.12 billion in January 2013 to NIS 3.09 billion in January 2014. The 3 major Israeli chain supermarkets were accounted for total sales of 40.5%.

The decrease in sales at Shurfersal, Mega, and Coop Israel affected all segments. For instance, food sales, which have been accounted for total sales of 76%, has dropped by 2.7%. Sales of personal care products have fallen by 7.5%; sales in cleaning supplies and beverages have decreased by 3.7%.

In response to the sales drop in these national chain supermarkets, Shufersal decided to launch a campaign back in January. Shufersal has nearly doubled it's adverting expenses in efforts to ensure the continuity of it's business in January, according to Ifat Business Information Ltd.

Mega's advertising expenditure, however, remains the same. Several suppliers of Mega believe the drop in sales at Mega is greater than that of Shufersal. While Mega has already sold some of it's discount stores back in 2013, supplier still claim that the sales were still weak at Mega in the City format.

"Shufersal is on the air all the time, with wild ads. It's feeling the pressure, but it should take care of itself. The method of taking money from suppliers is pathetic.", a top supplier of Shufersol told Globes.

He further stated, "Everything came together at the end of the year and the start of the year. It is not related to anything. I cannot say that January was great, but I promise you that we're taking care of business”.