Israeli Stores Prepare for Tough Holidays as Price Consciousness Grows Among Shoppers

A study, released ahead of the fall holiday season, found that 65% of consumers compare prices before buying an item.

Retail chains are expected to wage a fierce battle with advertisements and deals to win the hearts of consumers ahead of this year's fall holiday season.

One of the reasons is that this year most of the holiday shopping is expected to be spread out over several days and not over weeks, as was the case in previous years. But this year, price is also expected to play a more important role, in fact the most important role, in Israeli purchase-making decisions.

To mark the half-year point on its Semel project for inspecting prices, the Israel Consumer Council commissioned a study by Geocartography Knowledge Group to examine consumers' purchasing habits. The study found that 65% of the survey's 500 respondents compare prices before buying an item and that 50% of respondents said that price was their primary motivating factor when making a purchase – a 20% increase over last year.

Still, that does not meaning advertising is useless. Some 38.5% of those surveyed said they use television, radio and newspaper ads to decide where to buy their groceries. Shoppers are also using the Internet to compare prices, with 21% of respondents surfing price comparison websites while 16% looking directly at retail chains' websites.

The survey also found that the distance of shopping locations from one's home played a significant role in where purchases were made. The survey showed that 41% of respondents said that they did their grocery shopping at a supermarket located up to two kilometers from their home, while 53% said they did their grocery shopping up to three kilometers from their home. Among the religious, the preference for nearby shopping appears to be more pronounced. The survey found that among religious Zionists and ultra-Orthodox Jews 42.5% preferred to shop within less than one kilometer of their home. Those who earned below the average wage also appeared to travel less to do their shopping, with 52% of them saying they buy their groceries at a store less than two kilometers away, and 37%, from a store less than a kilometer away.

There was even a gender difference in how far respondents were willing to travel to go shopping. More women, 46% to be exact, said they shopped near their home compared to 36% of men who did so.

However, there is some trade-off between distance and price. Semel project found that consumers could save thousands of shekels per year by making their purchases at a store located hundreds of meters from the closest purchase location near their house.

Ofer Vaknin