Shopping at Arab Supermarkets Costs Much More

A survey by TheMarker found higher prices, fewer choices at stores in Arab cities and neighborhoods.

If you want to pay less for your groceries, just do your shopping in the closest Arab town, or such is the assumption in Israel. But as it turns out, that's not exactly the best way to keep your bills down, TheMarker has found .

A survey of supermarkets in four Arab locales turned up antiquated stores, a relatively thin selection of goods and prices much higher than those in neighboring Jewish towns.

TheMarker checked supermarkets and mini-markets in Haifa, Nazareth and Fureidis on July 18, and supermarkets in Jaffa on July 19. Prices were compared to those at discount supermarkets in the closest Jewish town.

To our surprise, prices were often tens of percentage points higher in the Arab cities than those at the discount stores in Jewish towns. Furthermore, we drew up a list of 60 items to compare, but due to the poor selection at the Arab stores, we were forced to drop several items from our survey.

Most of Israel's big grocery chains don't have stores in areas heavily populated by Arabs. Aside from one Hatzi Hinam in Nazareth, we found only relatively small supermarket chain stores and neighborhood stores, generally owned by local Arab residents. These stores offer a relatively limited selection of products, and resemble the supermarkets in Jewish locales from 20-30 years ago. The prices, however, are more updated.

Food is the Arab sector's single largest expenditure, making up 25% of all annual household expenses, versus 16% for the Jewish sector, according to consulting firm Czamanski Ben Shahar. Arab shoppers tend to make lots of small purchases, and they prefer to do most of their shopping at Arab-owned stores, particularly in stores owned by people they know personally, the firm found.

Changing supermarket trends

But things may be changing, at least to some extent. Farida, a woman who lives in Yafia, near Nazareth, spends between NIS 100 and NIS 150 a day to feed her family of five. She used to shop at the corner store next to her house, but now she goes to Machsanei Kimat Hinam in Nazareth in order to cut costs, she says. Like their Jewish counterparts, Arab consumers have become more aware of prices and now spend more time looking for cheaper alternatives, she says.

"It's well-known that these corner stores are more expensive, and I buy a few things there only if I have no choice. Once I went as far as Afula in order to shop at Rami Levi and it really was cheaper, but the trip is too long just to go shopping. My husband often just goes to Migdal Ha'emek to shop at Osher Ad, which saves us a lot. Too bad we don't have more options nearby," she says.

Fureidis: Few choices

In Fureidis, TheMarker visited a branch of King Store, an Arab-owned chain, as well as a neighborhood mini-market called Hawashi. We were greeted warmly at Hawashi, but we were disappointed by the limited selection; we found only 12 products we could compare with the Super-Sol Deal in nearby Or Akiva.

King Store had a better selection. At first glance, it looks like a tidy warehouse, with dim lighting and tall shelves. Most of the products are either the store brand or other unknown brands. Many of the items are being sold in bulk: buckets of ketchup and oil, massive cans of preserves - way larger than anything you'd find in a Jewish supermarket. Prices were lower than those at Hawashi, but still higher than at a discount store in a Jewish town. For instance, Osem's Perfecto-brand spaghetti cost NIS 9, compared to NIS 7.40 at Super-Sol Deal - a difference of 21%. In total, the products we checked cost an average of 11% more at King Store than they did in Or Akiva. At Hawashi, the difference was 23%.

Haifa: Consumer-friendly

In Haifa, home to both Arabs and Jews, we checked Super Naama Suidan and Super Bar Lekol in the lower city, an Arab area, and compared them to national chain Mega Bool at the Kastra Center in Hof Hacarmel. We found price differentials as high as 20% at the Arab-owned stores.

At Suidan, the shopping experience resembled that at a deli or an organic store. The shelves offered a host of well-known imported brands, while the deli counter offered an impressive selection. The store was clean and inviting, but prices were significantly higher than at Mega Bool and Bar Lekol. For example, Osem's bamba snack cost NIS 5.90, compared to NIS 5 at Mega Bool and NIS 4 at Bar Lekol. The latter had chicken soup powder for NIS 22, while it cost NIS 29.90 at Suidan.

Super Bar Lekol is relatively large, but doesn't fully recreate the shopping experience at the national chains. It was relatively dark inside, and wasn't well-marked from the outside. But the prices were consumer-friendly: dry goods and produce cost less than at Mega Bool. The service was also exceptionally friendly and personal. As a shopper debated whether to buy mango, the manager offered her a discount, saying, "It's most important that you get everything and be satisfied." Ultimately, Bar Lekol was 4% cheaper than Mega Bool, but Mega Bool offers a better selection, parking, more space, and also important - air conditioning.

Nazareth: Best selection

That day we also made it up to Nazareth, Israel's largest Arab city, with more than 70,000 residents. We were surprised to find that only one Jewish-owned chain had a branch there: Machsanei Kimat Hinam. And even that store was operated by a franchisee.

Aside from Machsanei Kimat Hinam, we also visited Shamshoum Market in Nazareth, and compared them to Mega Bool in neighboring Upper Nazareth. These stores had some of the best selection out of all those we surveyed. We found a total of 29 products to compare.

Shamshoum offered a pleasant shopping experience, but it was also the most expensive of the three, costing 8% more than Machsanei Kimat Hinam, which was the cheapest.

Jaffa: Broad selection

Our final stop was Jaffa, where we visited Super Zol Biyari and Super Abed Saif. Zol Biyari lacked price stickers and the receipt also failed to name all the items we bought. While the selection was broad, the store did not appear to be orderly or well-maintained. Ultimately, prices were 27% higher than at Super-Sol Deal at Tel Aviv's Azrieli Center. Abed Saif had a better selection, better upkeep and welcoming employees. Our basket, however, was 14% more expensive than Super-Sol Deal.

Marketing mistakes

We brought our findings to Bilal Salah, CEO of the King Store chain in Fureidis, who expressed surprise, noting that he is committed to offering the lowest prices. "The Fureidis store is small, but in other stores you won't find these kind of price differences," he insisted.

Arab shoppers favor name brands like Osem, but generally buy them in large quantities after comparing prices, he said. Many of the shoppers show up with coupons or take advantage of sales, he added. Regarding the lack of price labels, Salah said things were unorganized because of the Ramadan holiday. "On normal days, you won't find any products without price tags," he said.

Rani Zim, one of the owners of Machsanei Kimat Hinam, said the main reason prices are higher in Arab locales is the lack of competition. "If you enter small areas, it's no wonder that prices are high. Arab shoppers are loyal and don't quickly switch stores. That's apparently another reason for the higher prices," he said.

Regarding the lack of national chains in Arab locales, a supermarket executive said some had attempted to penetrate the sector but failed. They had failed to understand the sector's needs, he said. For instance, they had not adopted their marketing to Muslim and Christian holidays, and they also hadn't figured out how to use the neighborly relationships within the towns to their advantage. "You need to do more than simply translate into Arabic," he said.

Gil Eliahu