Passover Sales Spike but Won't Save Israel's Malls

The sales downward trend is expected to continue as more and more Israelis turn to the web for their shopping

Adi Dovrat-Meseritz
Adi Dovrat-Meseritz
Send in e-mailSend in e-mail
Israel's Ayalon mall.
Israel's Ayalon mall.Credit: \ Moti Milrod
Adi Dovrat-Meseritz
Adi Dovrat-Meseritz

The malls had some good news over the Passover season, with sales up 2.37% compared to the Passover season last year, according to data from the Retail Information System company, which based its assessment on reports from 3,000 stores in commercial centers for what it defined as the 22 Passover season shopping days.

RIS noted which malls had exceptionally higher sales; among them was the Kanyon Hagadol in Petah Tikva, which showed a 6% increase; the Ayalon Mall in Ramat Gan with 5.7% higher sales, the Ramat Aviv Mall, up 4.8% and Big Eilat, up 4.4%.

Still, it was limited consolation for the malls and isn’t expect to affect the sales downtrend, as consumers continue to increase online purchases and do more shopping abroad, spurred by the lower airfares that are the result of the open skies policy.

Moreover, RIS’ data is very general; the company refused to issue statistics for clothing and footwear during the Passover shopping period. It’s thus very possible that the most of the Passover sales growth came from other areas, like gifts, house wares, food and more, while the clothing and shoe stores are still having a hard time.

February, for example, ended with an 8.2% drop in clothing and shoe store sales compared to the same month last year, while in January those stores showed a year-on-year drop of 8%. The worst showing was this past December, dubbed “Black December” by clothing retailers, with a drop of 18% over the previous year. From December through February, fashion and shoe retailers have seen sales drop 12%.

According to economic consulting firm Czamanski Ben Shahar, in 2017 Israelis spent between 2.5 billion and 3 billion shekels ($694.4 million to $833.3 million) on online clothing purchases, mostly on international websites. The drop in airfares has led to an additional 1.1 billion shekels being spent on purchases abroad, leaving only 15 billion shekels for the Israeli fashion market.

Fashion chains have also had to cope with high rents, because only two mall ownership groups, Melisron (Ofer Malls) and Azrieli, control around a third of the turnover in the mall sector and they raised rents in 2017 despite the drop in their tenants’ revenues.