Carrefour Israel to End Discounted Basket Scheme, Prices Set to Surge 30%
Carrefour Israel will end its discounted 100-product basket initiative, causing prices to surge by 30% in 54 branches as the state-backed pilot concludes.
Carrefour Israel is set to terminate its discounted grocery basket initiative in about two weeks, following a report by Calcalist. Prices for 100 essential products across 54 branches will surge by approximately 30%. The Ministry of Economy announced that the initial pilot period of the "Israel's Basket" project has concluded, and any decision regarding its continuation will be left to the incoming government.
The initiative, spearheaded by Minister of Economy Nir Barkat, faced severe public criticism and was widely labeled a failure. Critics argued that the project served as a direct subsidy funded by taxpayers, costing 50 million shekels annually in state-backed advertising, while failing to structurally lower soaring food prices in Israel. Carrefour was the sole retail chain to participate in the tender, offering a 30% price reduction on selected goods in roughly a third of its stores.
Financial Strain and Consumer Backlash
During the second quarter of operating the discounted basket across 50 branches, Carrefour's same-store sales dropped by 7.2%, and its gross profitability eroded. Consumer groups also slammed the initiative for including high-sugar, high-sodium, and high-fat products, as well as for allowing price cuts in only a fraction of the chain's locations. Competitors largely ignored the move, and Carrefour reportedly raised prices in its non-participating branches.
"We are attentive to our consumers, their changing shopping habits, and their price sensitivity," said incoming Carrefour CEO Inbal Harson. "Immediately following the end of 'Israel's Basket,' we will launch a nationwide campaign offering strong and attractive discounts across all 144 branches and online formats."
New Marketing Strategy Ahead
As exposed by Calcalist, Harson's first major decision was to decline the option to extend the project for an additional six months, effectively walking away from a potential 25 million shekel state-funded advertising campaign. To soften the political blow of the project's collapse, the Ministry of Economy framed the termination as a deliberate choice to let the next administration evaluate the model.
To mitigate the impending price spike for consumers after the Sukkot holiday, Carrefour plans to roll out a new marketing strategy dubbed "Carrefour Special Deal," featuring targeted discounts both in-store and online.
