The Passover shop ping season turned out to be better than retailers had expected, with a sharp decline in pre-holiday shopping offset for the most part by a surge in spending during the intermediate days last week.
Data from Retail Information Systems, which collects sales from 2,000 stores around the country, found that sales for the two weeks before the holiday and the week of the intermediate days were down 1.8% from a year ago at all shopping centers, to 72 shekels ($18) per square meter.
It was a decline, but still far less than the drop of more than 13% that RIS had found in the two weeks before the holiday. Moreover, while strip malls (known as power centers) reported a sharp 6.5% drop in sales for the three weeks, Israel’s big enclosed malls enjoyed a 1.2% rise.
Malls have expanded their floor space so rapidly that many industry observers say the pace of consumer spending growth can’t possibly keep up. And merchants disagreed whether the weather drew people to the malls or not.
“The weather was pleasant enough and there was a whole week off, so many people didn’t go to work and hung around the malls with their kids. It seems people bought less food and pampered themselves with other things,” said one retailer – who sells watches and jewelry – about the intermediate days, calling the intermediate-day sales “fantastic.”
“The weather toyed with us – between a Hamsin [dry desert wind] one day, and cold and rain the next. That’s why we have to wait and see for all of March and April, to compare it with March-April last year,” said Gil Gazit, CEO of the Zahav Mall of Rishon Letzion who estimated sales at his mall had shown a double-digit difference so far.
Most retailers said they didn’t want to pass judgment on the selling season yet and would wait to see total sales for March and April together.
“Passover this year was different from the other holidays. It came earlier in the year than Passover 2014, while the election played a role, bringing down sales in the weeks before and then a big rise on Election Day itself,” said Gazit.
Passover this year began April 3 in the Gregorian calendar, a full 11 days earlier than in 2014. Israel’s March 17 general election, less than three weeks before the holiday, was an official day off and brought reams of shoppers into the malls.
Gazit attributed the pre-holiday downturn to changing shopping patterns. Where once people splurged on gifts for themselves in the 10 days or two weeks before Passover, nowadays they treat themselves to presents all-year-round, he said.
“Only three days before the holiday do they start buying gifts. They almost don’t buy any gifts for themselves – mainly gifts for others,” he explained.
The jewelry merchant said the retail segment was having a difficult time. He bemoaned high rents and management fees at the malls, and an overexpansion of malls that is cutting into sales per square meter.
“It’s causing prices to go up, because the chains have to raise prices to cover all these high expenses. That’s one reason for high prices in Israel,” said the retailer, who asked not to be identified.