Israel Retail Report Q1 2011
Business Monitor International, January 2011, Pages: 55
The Israel Retail Report provides industry professionals and strategists, corporate analysts, retail associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on Israel's retail industry.
BMI’s Q111 Israel Retail Report forecasts that the country’s retail sales will grow from an expected ILS139.29bn (US$38.82bn) in 2011 to ILS166.95bn (US$46.53bn) by 2015. Key factors behind thisgrowth are Israel’s underlying economic growth, sophisticated consumption habits, its growingpopulation and rising disposable incomes.
Israel’s nominal GDP is predicted to be US$229.9bn in 2011. GDP growth is forecast to be 3.1% in 2011, slightly weaker than 2010’s rate of 3.4%. Average annual GDP growth of 2.8% is predicted by BMIbetween 2011 and 2014. With the population increasing from an estimated 7.7mn in 2011 to 8.1mn overthe forecast period, GDP per capita is predicted to rise to US$34,974 by 2014, an increase of 17.3%.The Jewish tradition of offering gifts to relatives and friends at festivals during the year – Hanukkah inDecember, Passover in March/April and Rosh Hashanah (Jewish New Year) in September – generateshealthy demand for products such as consumer electronics, fashion goods and accessories, jewellery andother quality goods. Also, with about 30% of the Israeli population under 14, the youth market presentsgreat potential for toy and game retailers.
In 2005, 63.3% of the Israeli population was described by the UN as economically active, with 35.5% in the 20-44 age range important for retail sales. In 2010, an estimated 64.3% of the population waseconomically active, but the proportion of those in the 20-44 age band is estimated to have fallen slightlyto 35.3%.
A very high level of urbanisation is also contributing to retail growth. In 2005, 91.7% of the population was classified by the UN as urban, and this is forecast to increase to 92.0% by 2015.
In terms of retail sub-sectors, Central Bureau of Statistics (CBS) data show that in 2006, 3.9% of the Israeli household budget was spent on furniture and household equipment. 3.4% went on clothing andfootwear, 1.3% on cosmetics and 0.4% on jewellery and watches.
According to BMI data, the retail sub-sectors that are likely to show strong growth over the forecast period include consumer electronics, with sales predicted to rise by nearly 17%, from an expectedUS$2.95bn in 2011 to US$3.44bn by 2014. Spending on consumer electronics devices will be supportedby the falling unemployment rate, which we expect to drop to 6.5% by the end of 2011. A growingpopulation and rising computer and internet penetration will help drive growth, along with newtechnologies and feature-rich products such as smartphones, higher-capability netbooks and highdefinition(HD) TV sets.
The over-the-counter (OTC) pharmaceuticals sector is forecast to grow from a predicted US$0.42bn in 2011 to US$0.52bn by the end of the forecast period, a rise of nearly 25%.With car ownership levels at a low base, vehicle sales are forecast to rise by 43.2%, from an expectedUS$6.23bn in 2011 to US$8.93bn by 2014.
We estimate that overall food consumption in Israel in 2011 will account for 47.6% of total retail sales and be worth US$18.29bn. Food sales are forecast to reach US$21.54bn by 2014. Mass grocery retail(MGR) sector sales are forecast at US$4.35bn in 2011, representing 25.6% of the total food market. BMIexpects its value to rise to US$5.14bn by 2015, when the sector will account for 25.8% of the foodmarket. Exposure to modern retailing and its convenience has led to an interest in packaged and processedfoods and increasingly sophisticated consumption habits in Israel.
Retail sales for our set of Middle East and Africa (MEA) countries in 2011 are predicted to amount to US$196.69bn, based on the varying national definitions. Total consumer spending for the region based onBMI’s macroeconomic database is forecast at US$722.41bn. In 2011, BMI predicts that South Africa andIsrael will together account for an estimated 56.8% of regional retail sales, and their combined share isexpected to rise to 57.2% by 2014. For Israel, its estimated 2011 market share of 19.4% is expected todecline to 17.3% by 2014.
Executive Summary
SWOT Analysis
Israel Retail Business Environment SWOT
Israel Political SWOT
Israel Economic SWOT
Business Environment Outlook
Middle East And Africa Business Environment Ratings
Table: Middle East And Africa Retail Business Environment Ratings
Israel’s Retail Rating
Limits To Potential Returns
Risks To Realisation Of Returns
Market Overview
Current Trends
Key Players
Industry Forecast Scenario
Retail Growth Outlook
Table: Israel’s Retail Sales Forecast, 2007-2015
Table: Retail Sales Breakdown By Key Segment, 2011f
Consumer Outlook
Macroeconomic Outlook
Table: Israel Economic Activity, 2007-2014
Regional Retail Outlook
Table: Middle East And Africa Retail Trends, 2007-2014
Table: Regional Retail Sales By % Share, 2007-2014
Current Trends
Mass Grocery Retail
Israel Mass Grocery Retail Industry SWOT
Market Overview
Table: Structure Of Israel's Mass Grocery Retail Sector – Sales Value By Format (US$bn)
Table: Estimated Value Of Sales Per Outlet, 2008
Industry Forecast Scenario
Table: Israel Mass Grocery Retail Sales, 2007-2015
Table: Israel Grocery Retail Sales Breakdown, 2008 And 2018 (%)
Industry Developments
Consumer Electronics
Israel Consumer Electronics SWOT
Market Overview
Table: Israeli Distributors For Leading Brands
Industry Forecast Scenario
Table: Consumer Electronics Overview, 2007-2014
Industry Developments
OTC Pharmaceuticals
Israel Pharmaceuticals SWOT
Market Overview
Industry Forecast Scenario
Industry Developments
Country Snapshot: Israel Demographic Data
Section 1: Population
Table: Demographic Indicators, 2005-2030
Table: Rural/Urban Breakdown, 2005-2030
Section 2: Education And Healthcare
Table: Education, 2002-2005
Table: Vital Statistics, 2005-2030
Section 3: Labour Market And Spending Power
Table: Employment Indicators, 2001-2006
Table: Consumer Expenditure, 2000-2012 (US$)
Table: Average Annual Wages, 2000-2012
BMI Methodology
How We Generate Our Industry Forecasts
Sources
Product Samples
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