Report: Price-gouging isn't just for supermarkets
Survey finds gross profitability increased in most sectors of the economy - a sign that competition was lacking in these sectors, said BDI CEO Eyal Yanai.
The large supermarket chains weren't alone: According to Business Data Israel, numerous sectors raised prices over the past year regardless of the cost of their imports, thus increasing their profits at the expense of the consumers.
These sectors include construction, vehicles, fashion and restaurants. BDI compared data on the profitability of these sectors between August 2010 and September 2011 and August 2009 and September 2010. The comparative study included small and medium-sized businesses that are not publicly held.
The survey found that gross profitability increased in most sectors of the economy - a sign that competition was lacking in these sectors, said BDI CEO Eyal Yanai. Since there were no significant changes in input prices, this means most of the change was from increased prices.
The biggest change was in the aluminum sector, where average gross profitability was 25.1% - an increase of 24% from the previous period. Building contractors saw their profits increase 16%, to 21.9%.
Paints and chemicals producers saw profits increase 11%, to 25.3%. Auto repair shops saw profits increase 12%, to 35.3%; and restaurants and coffee shops increased gross profits by 4%, to 34.4%.
However, in the food sector, which includes the supermarket chains, minimarkets, convenience stores and neighborhood stores, profitability decreased by 5%, to 20.8%. Since the medium-sized and large supermarket chains increased their profitability, this means the smaller stores lost ground.
Yanai said the trend was unlikely to continue this year, due to both the social protests and the global recession.