Israel Retail Growth Slows to 0.8% as Supermarket Sales Contract
Israeli retail sales slowed sharply in the third quarter with an annualized growth rate of 0.8%, driven by a 4.5% decline in supermarket purchases as consumer spending cools following early-year stockpiling.
Retail sales in Israel have hit a turning point following six months of steady growth, according to new figures released by the Central Bureau of Statistics. During the July–September quarter, total retail revenue grew at an annualized rate of just 0.8% when adjusted for inflation. This represents a significant slowdown compared to the April–June quarter, when revenue expanded at an annualized pace of 5.6%.
The most prominent shift occurred in food retail chains. Sales volumes in the food sector declined at an annualized rate of 4.5% during the third quarter, following a slight contraction of 0.3% in the preceding quarter. This indicates that Israeli consumers have progressively reduced their purchases at supermarket chains over recent months.
Despite the recent cooling trend, cumulative figures for the first nine months of the year remain positive. Total retail revenue from January to September stands 6.7% higher than in the corresponding period of 2025, while food sales recorded a 4.9% increase. The recent deceleration follows a period of rapid consumption, with CBS charts indicating that food sales peaked around May.
According to the Central Bureau of Statistics, the data also highlights a sharp surge in food purchases at the start of the year coinciding with the onset of Operation Roaring Lion. Analysts note this mirrors consumer behavior observed in March 2020 during the initial outbreak of the COVID-19 pandemic, when households rushed to stockpile groceries ahead of widespread lockdowns.
Sector Divergence in Retail Growth
Not all retail sectors are experiencing a slowdown. Between January and August, sales across textile and apparel chains surged by 11.8% compared to the previous year. Durable goods, including home appliances and furniture, registered a 10.3% increase. Meanwhile, chains specializing in cosmetics, pharmaceuticals, toys, and books posted a modest gain of 5.3%, whereas fuel sales remained virtually unchanged.
This consumption pattern aligns closely with credit card transaction data published by the Central Bureau of Statistics. Apparel and footwear led credit card spending with an annualized growth rate of 16.7%, while food purchases showed a marked deceleration.
Economists emphasize that these figures remain preliminary, derived primarily from major retail chains. The Central Bureau of Statistics is scheduled to release updated assessments next month incorporating comprehensive data from all monitored networks. Furthermore, the statistics cover retail chains exclusively rather than the entire commercial sector, meaning consumer shifts toward smaller independent shops may influence overall market dynamics.
