Supermarkets raised prices 5 times faster over last 4 years than previous 4 — study

Food prices rose nearly five times faster over the last four years than during the four years before that, new research from Tel Aviv University shows.

This has forced households to spend hundreds of additional shekels on a basket of popular products, compared with just a few shekels more the four years previously.

The analysis, published Sunday, identifies a broad wave of price increases from 2023. Towards the end of that year, Israel went to war following the murderous invasion of southern Israel by Hamas terrorists on October 7.

While higher VAT, taxes, and government-controlled prices contributed to the hikes, the researchers suggest retail chains exploited the government’s and public’s focus elsewhere.

“The enormous gap between the price increases in the two periods shows that the high cost of living is not inevitable,” said Prof. Itai Ater, who conducted the study with doctoral student Adi Omer at the university’s management school.

“Curbing prices and even bringing them down requires genuine government action and consistent, comprehensive, and determined measures to promote competition, remove barriers, and address concentrations of market power in the food sector,” he said

Price rises were most pronounced at neighborhood stores, where the cost of the basket skyrocketed by 19.6 percent. Comparable figures for online and discount stores were 19% and 14.5%, respectively.

Using daily price data from Pricez, the researchers analyzed average monthly prices after discounts at six major retail chains.

In order to allow a precise comparison of trends over time and between retailers, they used a fixed basket of 80 products from a wide range of categories, from food to baby products and cleaning materials.

The research showed that all chains raised prices substantially over the last four years compared with the four years prior, led by Shufersal Deal (22.7%, compared with 0.6% between September 2018 and 2022). They were followed by Shufersal Sheli and Freshmarket (19.6%, compared with 2.3% and 6.3%, respectively, in the earlier period), Victory (where prices rose an average of 16% over the past four years, compared with 1.2% during the preceding four years), Rami Levy (10.3%, compared with 6.1% previously) and Yohananof (8.5%, compared with 4%).

The trend also applied online. At Shufersal Online, the basket rose by 24% over the past four years after remaining almost unchanged during the preceding four years, with an increase of just 0.1%. At Victory Online, prices increased by 18.6%, compared with 3.8% in the earlier period, meaning the rate of increase was nearly five times higher.

At neighborhood stores such as Shufersal Sheli and Freshmarket, the average price of a 100-gram (3.5 ounce) bar of Elite Para milk chocolate rose 77.9%, from NIS 5.21 ($1.70) in September 2022 to NIS 9.26 ($3) in August 2026.

Taster’s Choice coffee rose 19.7%, from NIS 29.70 ($9.70) to NIS 35.55 ($11.60) over four years, compared with a modest 3% increase, from NIS 29 ($9.45) to NIS 29.85 ($9.73), during the earlier period.

A one-kilogram (2.2 pound) pack of Sugat Classic Jasmine Rice rose by 17.7%, from NIS 9.72 ($3.20) to NIS 11.44 ($3.73), after dropping by 10.5% over the preceding period, from NIS 11.40 ($3.72) to NIS 10.20 ($3.33).

The researchers explain that a VAT increase (from 17% to 18% from January 2025), combined with rising municipal taxes, water and electricity rates, and prices of government-regulated products, all contributed to the price hikes. However, they added, a stronger Israeli shekel and a drop in the global food price index from its 2022 peak should also have helped limit price increases.

Government intervention, they said, could have limited the sharp trajectory upwards.

“The impact is particularly severe for low-income families, who spend a larger share of their income on food,” Prof. Ater said, adding that without government action, consumers would “continue to pay the price at the checkout.”