Residents of outlying cities pay more than residents of the center of the country to shop at the same grocery stores, TheMarker revealed last week. But location isn't the decisive factor - the number of competing grocery stores within the city is, indicate TheMarker's latest price comparisons.
Prices may be high even in cities in centeral Israel so long as there aren't many grocery stores in town.
Thus, a price survey by TheMarker found that residents of both Nes Tziona and Dimona pay about 30% more to shop at their local branches of Super-Sol Deal than do residents of Ramat Gan shopping at the branch on the border of Bnei Brak, near the Ayalon mall.
The deciding factor seems to be the number of supermarkets in each city. There are 23 different supermarkets in Bnei Brak and Ramat Gan. Not far away in Nes Tziona, there are only two supermarkets. In far-flung Dimona, off in the Negev desert, there are four supermarkets.
That works out to one supermarket per 6,300 residents in Ramat Gan and Bnei Brak, one supermarket per 8,100 residents in Dimona and one per 19,500 residents in Nes Tziona.
A similar survey conducted by TheMarker last week found that Dimona residents pay more than their peers in Haifa suburb Kiryat Haim when they shop at the local Mega Bool, Super-Sol's competitor. In this case, however, the price differences were less pronounced at only around 10%.
TheMarker also found that residents of Gaza border town Sderot pay 30% more at their local Super-Sol Deal than residents of Jerusalem.
The unifying factor in all these cases is that in cities with more supermarkets, the big chains charge less. Since their supply costs are identical around the country, the only factor setting prices is the supermarkets themselves.
TheMarker's latest market survey found significant differences in Super-Sol Deal's prices in Ramat Gan versus those in Nes Tziona and Dimona. For instance, a six-pack of Neviot water costs NIS 6.49 in Ramat Gan, NIS 10.98 in Dimona and NIS 10.49 in Nes Tziona. Tirosh grape juice costs NIS 13.99 in Ramat Gan, and NIS 17.99 in Nes Tziona and Dimona. A liter and a half of Coca-Cola costs NIS 3.99 in Ramat Gan, versus NIS 5.99.
The list continues with coffee (Red Mug instant coffee: NIS 15.99 in Ramat Gan, NIS 23.99 in Nes Tziona and Dimona ), pasta (NIS 3.99 per bag versus NIS 6.49 ) and mayonnaise (NIS 13.79 versus NIS 18.99 ).
The big supermarket chains cannot do this for much longer, said Tamir Ben Shahar, CEO of consulting company Czamanski & Ben Shahar. "Super-Sol and Mega have drawn antagonism. Consumers feel like the supermarkets cheated them," he said.
Both Super-Sol and Mega said in response that their stores are the cheapest in any given city.
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