Retail Sales in Israel Plunge, but Unrest May Not Be the Cause

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Hagai Street, in Jerusalem's Old City.Credit: Olivier Fitoussi

Retail sales have dropped 12.6% on average around the country, with the biggest falls in the Tel Aviv area, according to data compiled for TheMarker by the market research company Retail Information Systems, but many retailers think the drop has to do with seasonal factors as much as with the wave of violence sweeping Israel.

Taking sales data from 2,000 stories selling apparel, shoes, jewelry and gifts, books and other items, RIS said sales had dropped about 14% on a per-square-meter basis in Tel Aviv between last Tuesday and Saturday, compared with the same time in 2014.

In Jerusalem, which has seen the brunt of Palestinian attacks, sales were down just 7.3%. That smaller decline in the capital could be due to the fact that Jerusalemites are more inured to violence than are Tel Aviv residents.

But not everyone is convinced the drop in sales is due to the security situation. One executive for a nationwide fashion chain attributed the drop in Tel Aviv sales to construction of the light railway, which has snarled traffic and discouraged people from coming to the city, as much as to the security situation.

“Last Friday, the number of visitors at the Ramat Aviv Mall was half of a regular Friday but I think the drop in sales wasn’t due to the security situation but because people need a little rest after the last three months, which has the summer vacation followed by the High Holidays,” said one café owner.

In fact retail sales traditionally drop after the Sukkot holiday, which ended last Monday.

Sales were down 13.6% in the Negev area, 9.3% in the center of the counter and were down the most — 18.5% — in the north where much of the population is Arab.

They were down about 10% at so-called power centers, or strip malls, and 13.5% in downtown stores and were down 17% at enclosed malls, which have stationed more guards in recent days to offers customers a greater sense of safety.

Tourism never recovered from Operation Protective Edge [last summer’s Gaza war] and then we’ve had the recent events," said the manager of a fashion chain, who asked not be named. “In addition, September was weak for sales even before all the stabbing incidents started.”

With security guards suddenly in demand and no easy way to add more in short order, Economy Minister Arye Deri on Sunday authorized security firms to let guards work extra hours — up to 14 on a single day, although no more than 37 hours a week. The decision was made last Thursday after consultations with the Internal Security Ministry, the police and the Histadrut labor federation.

“We will supervise and enforce work conditions for guards, including additional rest periods because of the expanded hours,” said Deri. “Employers must still ensure all security guards’ rights are honored in accordance with the law.”

The Farmers Union cancelled a tractor protest in front of the Knesset planned for Monday, citing the security situation.