Babes in bargain land
Between formula, diapers, special detergent and more, kids can put a serious dent in your bank account. TheMarker checked around to see which chains are cheapest. The winner: Rami Levi.
Last week Israel’s parents woke up and discovered that they, like everybody else, were paying more for eggs, milk and dairy products, gasoline − and also a staple for some babies: formula.
From the start of the year, Materna had raised its prices by 5% to 7%. Similac had done so back in October 2010.
Materna commented that it had to because of the climbing cost of raw materials and added that prices to the consumer are set by the stores, not it.
Its blame-game tactics infuriated Rami Levi, owner of the eponymous chain, who fired off a letter to Materna CEO Efrat Gilat, claiming that for years his stores had been subsidizing baby food products at its own expense, and that the increase in prices wasn’t because of the retailers.
“In no other category beyond baby food do we run a loss like this,” claimed a top executive at another marketing chain.
“Because of the competition, we lost a shekel for each shekel we spend. It’s true that the chains set the prices, but the manufacturers raised the prices we have to pay them. So we had no choice but to increase the price to consumers. If we hadn’t, we’d be losing even more.”
Consumers could care less who is responsible for what, or who loses and how much. They care that they’re paying more.
A baby subsisting on formula eats 700 to 900 grams of powder in four to five days. A package of 700 grams of formula costs between NIS 50 to NIS 70 and a 900-gram package costs NIS 67 to NIS 90. The cost per month is hundreds of shekels.
Moreover, parents of infants also need diapers, which are also a heavy outlay despite various bargains.
They also tend to buy special soaps, shampoos, laundry detergents, creams and more. Which chain is the cheapest for baby?
We compared a cart of 21 commonly used baby products at Super Pharm, New Pharm, and three discount chains − Rami Levi, Mega Bool and Super-Sol Deal.
Rami Levi was cheapest all around with the basket costing NIS 00. Super Pharm was the costliest: NIS 811.
Rami Levi was cheapest on 10 of the 21 products and was most expensive on none.
Rami Levi was cheapest on big packages of baby formula, sometimes by a lot. For instance, on Similac Advance, everyone sells it for NIS 90 while Rami Levi sells it for NIS 74, a difference of 21%. His discount on Similac Top is about the same: His chain charges NIS 67 while the others charge NIS 75 to NIS 80.
There was one exception: on Materna Dairy, Super-Sol Deal was cheaper, charging NIS 48, while Rami Levi charged NIS 48.90. Elsewhere its sells for NIS 59.
Note that while Rami Levi is generally cheapest, it limits purchases to two per item.
“We don’t want store owners to buy from us at low prices and sell the products on,” Levi explains. He adds that the employees at the stores operate at their own discretion, however.
The differences on diapers were also wide, but there the picture is more muddled. Huggies made of organic cotton were cheapest at the discount chains, at NIS 50, while the drugstores charged NIS 65 to NIS 68 per package.
But Pampers Premium Care cost less at the drugstores and at Mega Bool, at NIS 55, while Rami Levi charges NIS 65. Also, many stores offer a sweet deal if the parent buys two packages.
Please note that the prices we show in this article were correct as of the day of our visits.
Baby goods prices fluctuate often. The drugstores are also likely to spring special sales, advising consumers usually through newsletters or advertising in the media.
Super Pharm commented that it has special sales practically every week, which change every two weeks, and often encompass diapers and formula.
It also offers a wide range of products under its Life brand, it added.
TheMarker’s inspection was carried out two days before a Life Style bargain spree, the chain added.
New Pharm commented that it offers consumers everything they need under one roofs and the consumer enjoys the shopping experience. It also has sales all year, it said.
Super-Sol said it rebranded nine stores as Super-Sol Deal Extra hypermarkets this very week, and prices of certain baby goods will be lower than at Super-Sol Deal.
Mega Bool said it offers the lowest prices on baby foods and products.
TheMarker visited the following stores on February 27: Super Pharm, Megal Bool and Super-Sol Deal on Yigal Alon Street in Tel Aviv; A New Pharm store at the Tel Aviv central bus station; and the Rami Levi store in Ramat Gan.
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