Paying too much at the supermarket? The Knesset plans to save you money

With economists promising skyrocketing prices on just about everything after the New Year, strategic shopping for household needs – especially groceries – has become essential for families. But how do you know you’re getting the best deal? Most people don’t have the time or inclination to run around to 10 different stores, looking for the best deal on chicken or oil.

For those seeking to pay less, the Knesset has a solution: a government-sponsored database that would record the price of goods in grocery stores and supermarkets that consumers could tap into, finding the best price on the items they need,

The idea is the brainchild of Knesset member Carmel Shama-Hacohen and other MKs on the Knesset Economics Conmittee, which Shama-Hacohen chairs. The committee held a meeting on the project this week, with MKS, community activists, and experts weighing in on the pluses and minuses of a database.

According to the proposal, participating stores (the legislation would determine who would have to join and who would be exempt), including supermarkets and small grocery stores, as well as outlets that sell cosmetics and gasoline, would automatically download data on prices directly from the cash register as items are scanned. The information would be entered into the database, automatically updating the “market basket” of those using the database to check for the cheapest prices, and displaying the address of the stores with the best buys.

Thus, a shopper using a smartphone app could scan an item at a supermarket and determine if there are better prices on the item elsewhere, and do a calculation of their entire shopping list to determine whether it’s worth running across town to save a few shekels on one item, or whether it’s worth it to finish shopping at the store they’re currently at, because other items on the list cost more in the other store.

While there are a number of smartphone apps that already do this, they are either crowdsourced, relying on shoppers to upload the information, or are limited to only a few supermarket chains. The advantage of this database for consumers, said the committee, is that most stores would be required to participate, and that the data would be stored and distributed by the Ministry of Industry, Trade and Labor.

“Shoppers are able to determine the price advantages of distinguishing between brands in a supermarket, but have no way of determining price differences on the same item in different stores,” said Shama-Hacohen. “The new law will give consumers the ability to do this, raising the level of real competition between the major supermarket chains.”

The proposal is a great idea for shoppers, said Miki Lapid, a consumer activist whose organization, the Even Yehuda Consumers Union, carries out surveys of weekly prices at 35 stores in the Netanya area, distributing the results to about 9,000 people. The surveys are difficult, but effective, he said. “When we first started, there was a 35% average difference between the most and least expensive stores. Now that difference is about 12%.”

Lapid said that it was consumer pressure, based on awareness, that brought prices down. “If the new competition in the cellphone market saved families 100-300 shekels a month, this database will save them 300-500 ($74-$125) a month,” Lapid added.

But not everyone will benefit, said Eli Stavi, and the small shopkeepers he represents as head of the “Makolet (Grocery) Forum” may well be driven out of business. A database like this promises an all-out price war as the “big boys” fight for consumer pocketbooks and loyalty. The small groceries that dot Israel’s neighborhoods don’t have the economies of scale to compete with large chains. But the database would not sound a death knell for the groceries, Shama-Hacohen said. “They can offer services in the neighborhood that large chains cannot, such as accessibility and later hours. It’s a little early to write their eulogies,” he said.

According to Yoram Cohen, director of the Israel Law, Information and Technology Authority – a department of the Justice Ministry – there is no legal reason not to implement the database, even though it would compel stores to join, as it would not interfere with stores’ freedom to do business and was in line with legislation encouraging marketplace competition. The information is publicly available, so there is no invasion of privacy. In fact, he said, the database was a great idea. “The stores already know a great deal about your purchasing habits.” The database, he said, “will restore power to the consumers.”

The committee will review all testimony and meet again after the holidays — but the MKs were serious about finding a way to implement this program, said Shama-Hacohen. A recent report by the state comptroller on the high price of food products in Israel released last week underscores the need for a price database.

“That report shows that Israelis are not paranoid when they claim that prices are higher here than elsewhere,” said Shama-Hacohen. “We intend to find ways to make sure they pay less.”