The social protest has waned, the holidays are over, and prices of some products on supermarket shelves have again skyrocketed, according to a "Globes" investigation at retailers.
For example, the price of Osem Investments Ltd's (TASE: OSEM)'s real powdered chicken soup has risen 150% at Shufersal Ltd. (TASE:SAE) discount chain Shufersal Deal from its price on the eve of Rosh Hashana on September 26, 2011, to NIS 25. The price of this product at Alon Holdings Blue Square - Israel Ltd. (NYSE: BSI; TASE: BSI) chain Mega has risen 140%, and it has risen 114% at Rami Levy Chain Stores Hashikma Marketing 2006 Ltd. (TASE:RMLI) to NIS 17. Osem's real powdered chicken soup costs 47% more at Shufersal Deal than at Rami Levy.
The difference in prices for mayonnaise is especially wide. The price of Telma mayonnaise costs 44-50% more at Mega Deal than at Shufersal Deal and Rami Levy. Mega Bull has raised the price of this product by 34% since Rosh Hashana, while Shufersal Deal has cut the price by 7%, and Rami Levy has hiked the price 66%.
The huge differences in prices of products at the different supermarkets also indicates the huge differences in their mark-ups.
Rami Levy has raised the price of frozen Nile Perch fillet by 66%, Mega Bull has raised the price by 20.7%, and Shufersal Deal has raised it by 10%. Even so, frozen Nile Perch fillet costs NIS 35 per kilo at Mega Bull - 40% more than the NIS 24.90 per kilo charged by Rami Levy.
Sharp price hikes have been made on a wide range of products, including ketchup, Starkist Tuna, and mineral water and other beverages.
However, the prices for some products are the same across supermarkets. For example, the price for Snowfrost frozen garden peas and corn is NIS 17 at all the supermarkets.
The Jewish New Year's holiday and Sukkot occurred at the height of the cottage cheese boycott and protests against high prices, and consumer demand fell. Retailers and manufacturers both realized that to maintain sales levels, they would have to make deeper price cuts. Price cuts at both Rami Levy and Shufersal hit their gross profits for the third quarter of 2011. Blue Square's gross profit actually rose, possibly indicating the chain did not itself finance the reduction in consumer prices. All the supermarket chains saw a sharp drop in profits, although this was not due to lower prices at Blue Square.
Retailers are now trying to build back their profit margins, and are raising prices as part of this effort.
In response, Rami Levy Hashikma chairman Rami Levy accused manufacturers, saying, "These are the price that suppliers charge us." He also pointed fingers at the government and regulators, saying, "The party responsible for everything is the public sector and the regulator. The country is more and more concentrated and monopolistic, and sets a bad example for the private sector. The government raised the price of land by 50%, and there is no competition. In the end, this also affects food. Five years ago, we paid $10 per square meter in rent, but we're now asked to pay $20-25 per square meter. This isn't what I'm giving, but what they are asking. I call on consumers not to buy at stores that raise prices."
Mega declined to comment on the report, and Shufersal did not respond.
Published by Globes [online], Israel business news - www.globes-online.com - on January 2, 2012
© Copyright of Globes Publisher Itonut (1983) Ltd. 2012