Sales figures show a sharp decline in consumption in November in almost all areas. The biggest cause for concern is the fall in FMCG (fast moving consumer goods), which covers food, beverages, hygiene and toiletry products, and so on. According to StoreNext, sales of food and beverages fell 3.3% in November, while sales of homecare and personal care products fell 3.6%. These declines are in addition to a fall of 9.6% in fashion sales and falls in sales of home textiles and DIY.
"We're up against the wall. It doesn't matter what you do, people aren't buying," a senior food industry manager told "Globes". "Consumers have stepped on the brakes," says Shufersal Ltd. (TASE:SAE) CEO Yitzchak Abercohen, "The market in November was very very weak, and it's not clear what happened, especially in the last two weeks. But to say anything definite, you need a whole quarter."
However, figures for the three months September to November are not encouraging either. Nielsen, which analysed the data, found that FMCG sales fell 2.5% in volume terms, with the sharpest fall coming in sales of beverages (-5.2%), despite the unseasonably warm weather in the period in question. Home products also registered a steep volume decline, of 3.8%.
The situation of the Israeli market is also bad in comparison with Europe. According to Nielsen, Europe reverted to a nominal growth rate of 3%. "In nearly every EU country, there was financial growth alongside stagnation in volume terms. In Israel, on the other hand, financial growth is low, and the market has undergone a volume slowdown."
Tnuva Food Industries Ltd. CEO Arik Schor says that it's hard to explain what exactly happened in November, when the downward trend in consumption sharpened. "There has been a decline in consumption all year," he says, "I can't explain what happened in November. We are seeing consumers coming to the supermarket more often, but their shopping baskets are less full, which means that they are being more particular about what they buy."
Looking at the 12 months to November, sales fell 0.9% in volume terms, according to Nielsen. Israel's population grows at 2% annually, and so in effect the annual decline in sales is 3%.
Published by Globes [online], Israel business news - www.globes-online.com - on December 12, 2013