Treasury: Food prices in Israel down 5.5% since 2015
Food prices in Israel are 5.5% lower than their peak prices in 2013 and 2015 due to increased competition between food retail chains – according to a survey published Sunday by the Ministry of Finance chief economist. The detailed analysis stresses the fall in profitability of Rami Levy Chain Stores Hashikma Marketing 2006 Ltd. and Victory Supermarket Chain Ltd. following their rapid expansion and also mentions a fall in profitability at Shufersal Ltd.
The Finance Ministry also observed that the fall in food prices comes alongside the rise in average salaries and thus a boost in purchasing power. The report says that, “The average salary in the economy rose 5% between the fourth quarter of 2015 and the fourth quarter of 2017, so that in recent years there has been a major rise in the purchasing power of households regarding food products.”
Over the same period, the report says that food prices rose in Europe. An analysis of the trend found that since 2014, food prices in Israel have fallen while rising 10% in Europe.
However, despite the fall in food prices in Israel, the report found that food purchases represented 13.3% of household expenditure in 2015 and 14.2% of household expenditure in 2016. This rise might mean that people are simply buying bigger quantities of food, or more luxury items. (Globes/TNS)