Food Prices in Israel Surge Nearly Fivefold Under Outgoing Government, Study Finds
Food prices in Israel surged nearly fivefold during the outgoing government's term compared to the previous four years, driven by neighborhood stores and online retail, a new Tel Aviv University study reveals.
The pace of food price increases in Israel during the term of the outgoing government surged nearly fivefold compared to the preceding four years, contrary to the government's central election promise. This finding emerges from a comprehensive study of an 80-item popular grocery basket spanning from September 2018 to August 2026, conducted by Prof. Itai Ater and doctoral student Adi Omer from the Coller School of Management at Tel Aviv University.
The sharpest spikes were recorded in neighborhood convenience stores and online channels, where many shoppers were forced to make purchases due to security restrictions during the war in Gaza and conflicts with Iran. According to the analysis, the grocery basket in neighborhood branches increased by 19.6% over the past four years, compared to a modest 4.3% rise in the previous four-year period. Online channels saw a 19% price hike over the last four years versus 4.1% previously, while discount supermarket branches experienced a 14.5% increase compared to 2.8% in the preceding period.
The Role of Market Leaders and Shufersal
The study analyzed a fixed basket of 80 goods across various categories, including Matterna Baby Formula Stage 3 (700g), Elite Milk Chocolate (100g), Tasters Choice Instant Coffee (200g), Sano Maxima Fabric Softener (4 liters), and Maadanot Cheese Borekas (800g). Shufersal led the retail surge after Amir Brothers acquired a 24.9% controlling stake in February 2024, initiating price hikes that other retailers quickly followed.
"When the issue of the cost of living is not on the governmental agenda, and public and media attention is focused elsewhere, companies in the food market seize the opportunity and raise prices," noted Prof. Itai Ater.
At Shufersal Deal, prices jumped by approximately 22.7% in the current period compared to just 0.6% previously, while the neighborhood subsidiary Shufersal Sheli saw prices climb by 19.6% compared to 2.3% in the earlier period. Victory recorded a 16% increase versus 1.2%, and Rami Levy prices rose by 10.3% compared to 6.1% previously.
Online Shopping and Delivery Costs
A similar trend unfolded online. Prices at Rami Levy Online, Shufersal Online, and Victory Online surged by 14.1%, 24%, and 18.6% respectively over the past four years, contrasting with increases of 9.3%, 0.1%, and 3.8% in the previous period. In cash terms, the basket at Shufersal Deal became 263 NIS more expensive in the current period compared to a minor 6 NIS rise previously.
Furthermore, while Shufersal's previous management aligned online prices with its discount branch rates, the Amir Brothers severed this connection, pushing online prices significantly higher than discount stores. Competitors mirrored this approach, accompanied by the cancellation of reduced delivery fee promotions and a subsequent 20% spike in food delivery costs across the market.