Shekem Electric's 39 branches buzzed into the night, as workers busily put new price stickers on items yesterday evening. Just hours before, importers of electric products seemed stumped - they were spotted with calculators in hand, trying to figure out the new prices of items, following the newly announced tax cuts.
Shekem Electric officials reported yesterday that prices have fallen by 10-20 percent. Refrigerator prices, they noted, decreased 13 percent; prices of television, video and DVD products went down 21 percent; washing machine prices fell 15 percent; and oven prices by 12 percent. The officials predicted that price reductions will have a major effect on sales figures, optimistically forecasting a 30 percent boost in total sales.
Shaul Zilberstein, general manager of Traklin Electricity, explained yesterday that the lower prices are more likely to influence sales of electronic items such as televisions and DVDs. The tax cuts will have less of an impact on what he called durables - refrigerators, washing machines and dishwashers. Consumers, he predicted, will flock to stores today. "The people of Israel understand that we needed a day [yesterday] to adjust prices," he said.
In one Traklin outlet, in Ramat Gan, business did not appear to be more intense than usual yesterday. "It looks as though people were frightened off by what they heard yesterday in the media," explained Yossi Hayat, manager of the Ramat Gan store. "They heard that they should be careful and wait a few days before buying - and that's what they've done. There were very few customers today."
Lior Levy, manager of Best Buy's Ramat Gan store also reported there was no great upsurge in customer activity yesterday. However, he added, "customers who had intended to make purchases [before the sales tax cut announcement] rushed to the store to carry out their plans today - perhaps they're worried that the final adjustment of prices will be more expensive than the prices that are being offered now."
Some customers were skeptical about the actual impact of the cut in sales tax. A shopper in Ramat Gan said yesterday: "The price reduction is a little less than what they announced yesterday in the media. It comes to about 10 percent."
Other shoppers were more enthusiastic about the cut. A Tel Aviv man explained: "After hearing about the tax cuts on television, I decided to have a look at refrigerator prices in stores. I have a refrigerator that's just three years old, but it's small. Discounts now are very large - about NIS 1,500 for an item - and so it looks like thanks to Bibi, I'm about to buy a bigger refrigerator."
The tax cuts are not likely to have an impact on products that come from euro bloc countries. According to Solly Sakal, chairman of the Sakal Group, which operates 42 stores in the Sakal Electricity chain, prices of products from the euro bloc will drop just 5 percent.
Sakal said that customers who purchased products that have yet to be delivered have called the chain and asked for rebates. The company has turned to state officials to clarify whether tax breaks can be given retroactively to such customers, Sakal said.
Aharon Meidan, CEO of Best Buy, said that his company decided to adjust prices on all items stored in inventory for the chain's 14 outlets. Prices for refrigerators, dishwashers and washing machines will drop, on average, 15 percent, while television prices will fall 18 to 20 percent. Savings on individual items will be significant, he added. A customer will save between NIS 900 and NIS 3,000 on a refrigerator purchase, and between NIS 400 and NIS 600 on a washing machine.
Meidan warned, however, that it will not be too long before importers from the euro bloc will take advantage of reduced taxes in Israel to raise prices of their products, in an effort to offset losses incurred due to fluctuations in the euro's value in recent months.
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