Israeli Consumer Spending: Supermarket Growth Slows in Q2

Are Israelis continuing to spend at supermarkets despite the high cost of living, or are they tightening their belts? New data released Tuesday by Israel's Central Bureau of Statistics (CBS) offers a surprising answer: consumer spending continues to climb, albeit at a more moderate rate than at the start of the year.

According to the report summarizing retail chain revenue for April through June 2026, sales values increased across most major retail sectors. The figures, calculated at constant prices and based on annual trend data, serve as a key indicator of Israel's economic health and private consumption patterns.

The data reveals a picture of consistent but slowing growth compared to the first quarter of 2026. Total revenue for retail chains showed a 3.3% increase during the April-June period, following a sharper 6.8% rise recorded in the first three months of the year.

Food network revenue, which directly affects every household budget, posted a 1.6% increase for April-June. By comparison, the previous quarter saw food network growth of 5.4% — representing a significant deceleration in the growth rate.

The CBS divides revenue data into two main categories: networks specializing in food, and networks specializing in other products. The second category encompasses a wide range of sectors including textiles and clothing, footwear, durable goods, housewares, and a "miscellaneous" category covering cosmetics, pharmaceuticals, toys, books, office supplies, and optical products.

These retail chain figures hold particular importance for economists because the data is collected monthly directly from leading networks by CBS surveyors, appearing a full month before the publication of general retail trade revenue data based on VAT reports. This makes them a fast and reliable indicator for examining Israeli consumer spending trends.

The CBS emphasizes that the newly published figures are preliminary, with a more precise update expected next month once complete information from all surveyed networks is received. The bureau also notes an important caveat: increased sales at large retail chains don't necessarily indicate a rise in total public purchases.

Sometimes the data simply reflects consumers shifting from small stores — neighborhood groceries and the like — to large retail chains, partly due to new branch openings, acquisition of existing stores, or closure of local shops.

The data raises intriguing questions about Israeli consumer habits. Does the deceleration in growth indicate the beginning of spending cutbacks? Or is this a natural stabilization following a sharp increase earlier in the year?

It's worth noting that revenue from networks defined as "food networks" doesn't consist solely of food products, but also includes sales of cleaning supplies and other items sold on their shelves. Therefore, the data reflects a broader picture of household consumption habits.

Coming months will reveal whether the trend of slowing growth continues, or whether Israeli consumer behavior will shift. For now, the data indicates that despite the high cost of living and economic challenges, Israelis continue spending at retail chains, even if at a more moderate pace than before.