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Reduction in Store-Based Retailing to Cause Slowdown in Israeli Retail Market: Ken Research

retailing

Ken Research announced its latest publication on, “The Future of Retailing in Israel to 2020; Comprehensive data overview of the market, with retail sales value and forecasts to 2020, offer insights on the changing trends and key issues within the Retail Market in Israel.The publication includes qualitative and quantitative insights of the changing retail dynamics in Israel across various product categories across different distribution channels; covering changing consumer behavior, economic and demographic factors, past & future retail sales trends, technological innovations& leading players within the Retail Market in Israel. The analysis of the aforementioned trends has been done for26 products across 9 product groups in the Israeli retail marketthat include: Apparel, Accessories, Luggage and Leather Goods; Books, News and Stationery; Electrical and Electronics; Food and Grocery; Furniture and Floor Coverings; Health and Beauty; Home and Garden Products; Music, Video and Entertainment Software; Sports and Leisure Equipment; for their sales through four channel groups (Value Retailers, General Retailers, Specialist Retailers and Online) which further includes 17 individual channels.

Brief Overview of the Retail Market in Israel

Retail market in Israel has been hit hard by the unstable security conditions in the country. Operation Protective Edge, an IDF military operation in Gaza, which began on 8 July and ended on 26 August 2014, led to significant reduction in sales of retail products as the Israeli population preferred to stay in their house. As a result, retailers in the otherwise profitable month of July-August witnessed huge losses. Many retailers cease their business while those that still operated reported considerable lower amount of sales. However, Israeli retail market started to recover in 2015, registering higher growth rates as compared to previous few years.

Looking at the retail market performance by product categories and by channel, in 2015, Food & Grocery dominated the product market by registering largest retail sales in the country. General retailers held the largest share of retail sales and dominated the distribution channel landscape in the market. As a result of government incentives to attract new domestic players and international players in the Israeli Retail market; market competition has gradually increased. With increasing adoption of online shopping by the Israeli retail market consumers, Internet retailing has emerged as a key trend in the market, providing for an efficient & convenient way of retailing. However, this increased internet retailing has been occurring at the cost of in-store retailing which is a serious issue. Also, the market is increasingly characterised by rising govt. intervention through introduction of various rules & regulations with an aim to encourage competition and reduce prices.

Key Factors Driving Growth in Israel’s Retail Market

Despite Unstable security conditions and rising cost of living in Israel, posing serious challenges to the retail market growth in the country; retail market sales will witness modest increase as the market recovers on account of various factors driving growth of the market. Some of the key factors driving retail market growth in Israel include:

  • Lowering of indirect taxes (VAT reduction)

Due to rising cost of living in Israel, consumers end up with lesser amount of money to spend on retail products. To deal with this issue, government is lowering indirect taxes. VAT has been reduced from 18% to 17% in Israel. This will lead to increased consumer spending on retail products.

  • Rising government intervention in the market

Israeli government is increasingly intervening in the retail market to encourage competition and reduce prices through various regulations. This will lead to increased sales of retail products as lower prices will make them more affordable to consumers. Recently introduced ‘Food Law’ has been a major government regulation aiming to encourage competition in Food retailing through various rules & restrictions

  • Opening up the market to personal imports

Import tax exemption on personal products has been increased from USD 350 to USD 500, which means that more products are now exempted from import taxes. This factor again significantly drives the retail market.

  • Growing Internet Retailing

Consumers are increasingly adopting the idea of online shopping as it provides for an efficient and convenient way of shopping anywhere and at any time. Hence, increasing internet retailing on account of rising internet penetration and mobile sales in the country has emerged as key retail market trend in Israel.

  • Influx of international brands

Gradually the number of market players in Israel’s retail market has been increasing, as a result of govt. incentives to attract and encourage entry in the market. Consequently there has been an influx of various international retailers as well as new domestic retailers in the market.

Future of Israeli Retail Market

Over the forecast period, 2015-2020, growth in Israel’s retail market is expected to occur at a decreasing rate. Increasing internet retailing at the cost of in-store retailing, rising cost of living leading to reduction in consumer spending on retail products and the unstable security situation in Israel will continue to challenge the retail market growth in coming years. However, growing popularity and increasing online sales as well as rising govt. intervention through various rules & regulations may prove to be major drivers of the market. Looking at expected future trends of the market by product categories and by distribution channels; Food & Grocery is expected to be the fastest growing category over the next five years. General Retailerswill continue to dominate the market in 2020. Among various distribution channels, online channel will be the fastest growing channel, followed by other general and non-specialist direct retailers. Also, Convenience Stores including Independents and Gas Stations are expected to register highest sales value of all channels in 2020.

 

 

 

To know more on coverage, click on the link below:

https://www.kenresearch.com/consumer-products-and-retail/wholesale-and-retail/future-retailing-israel/40172-95.html

Related Reports:

https://www.kenresearch.com/consumer-products-and-retail/wholesale-and-retail/future-retailing-venezuela/40168-95.html

https://www.kenresearch.com/consumer-products-and-retail/wholesale-and-retail/future-retailing-uae/40174-95.html

Contact:

Ken Research

Ankur Gupta, Head Marketing & Communications

[email protected]

+91-124-4230204

The post Reduction in Store-Based Retailing to Cause Slowdown in Israeli Retail Market: Ken Research appeared first on Ken Research.



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