2014-01-05 21:05:15 - Recently published research from Business Monitor International, "Israel Retail Report Q1 2014", is now available at Fast Market Research
The Israeli retail sector is set to continue to grow over the next few years, with its growing and highly urbanised population, together with increasing levels of disposable income, resulting in a strong rise in household spending across all retail subsectors. We are particularly positive about the future growth prospects for areas such as personal, insurance & other, as well as communications; however, we expect the highest proportion of the household budget to be spent on housing & utilities throughout our forecast period, with food & drink spending also taking a substantial share.
The new Israeli retail report provides an extensive and comprehensive forecast of various retail indicators including household spending and headline total spending across each retail subsector, household income
and employment forecasts, demographic forecasts and a detailed breakdown of household and per capita spending across a large number of retail areas including food & drink, clothing & footwear, household goods and a number of other subsectors.
Full Report Details at
Owing to the country's wealth and well-established mass grocery retail (MGR) sector, the Israeli retail market has many characteristics of more developed European markets. The market share of traditional retail (open-air markets, small local grocers and independent supermarket chains) is being eroded as the presence and acceptance of modern retail formats grows. The non-food sector is growing at a faster rate than the food sector as the retail market matures, with the growing dominance of modern shopping centres a major influence. Chains, rather than independent retailers, are becoming increasingly dominant, particularly in malls.
In a country in which more than 28% of the population is in the 20-39 years age range, important for household spending on the retail sector, large shopping malls are attracting young consumers who aspire to the international brands that are increasingly becoming available. Many of the malls in Israel were designed and built by Canadian architect David Azrieli, including the Malha Mall in Jerusalem and the Azrieli Center in Tel Aviv, the largest mall in the city. Meanwhile, the 47-acre Ganei Sarona project in Tel Aviv, currently under construction, is a new complex for commerce, recreation and entertainment on the site of the 140-year-old Templer colony.
We see long-term potential in the Israeli consumer market, particularly for non-essential items and aspirational purchasing by younger consumers whose incomes are rising. We forecast the average net household income will be US$44,250 in 2013, with almost a third of households falling into the top wage bracket of US$50,000+. By 2018, almost a half of households are expected to be in this top income bracket, which represents a very valuable demographic for increased household spending on luxury items beyond necessities such as food, utilities and transport. We expect a corresponding increase in household spending on personal care and communications; and, to a lesser extent, on clothing & footwear and furnishing & home.
While we believe that private consumption growth will decline over the coming quarters as austerity measures continue to depress spending, our medium-term outlook is more optimistic: we expect real GDP growth to average 4.0% per annum over the 2013-17 period, with private consumption recovering.
Recent Developments Include:
* Retail Group 3000, which operates the Toy Town chain, agreed in November 2013 to buy Office Depot's Israel franchise.
* American Eagle Outfitters has signed a multi-year franchise agreement with leading Israeli retailer Fox-Wizel.
* US-based children's merchandise retailer The Children's Place Retail Stores has also signed a 10-year franchise agreement with Fox-Wizel to open stores across Israel, with the first outlets scheduled to open during Q114.
Key BMI Forecasts:
* We expect total household spending to be US$118.61bn in 2013.
* Household numbers will reach more than 2.30mn in 2013, up 1.1% from the year before, and we expect growth to average 1.2% throughout our forecast period to 2018.
* Around 1.2mn households will be in the US$50,000+ income bracket by the end of 2018, according to our forecasts, up from 690,000 in 2013.
* In our proprietary Risk Reward Ratings, Israel scores an overall retail risk reward rating of 57.86, putting it in fourth place regionally, boosted by its high household spending per capita and strong forecast household spending growth, but held back by its small population and modest overall household spending.
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Business Monitor International (BMI) offers a comprehensive range of products and services designed to help senior executives, analysts and researchers assess and better manage operating risks, and exploit business opportunities, across 175 markets. BMI offers three main areas of expertise: Country Risk BMI's country risk and macroeconomic forecast portfolio includes weekly financial market reports, monthly regional Monitors, and in-depth quarterly Business Forecast Reports. Industry Analysis BMI covers a total of 17 industry verticals through a portfolio of services, including in-depth quarterly Country Forecast Reports. View more research from Business Monitor International at www.fastmr.com/catalog/publishers.aspx?pubid=1010
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