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Israel Retail Report Q4 2015

Israel Retail Report Q4 2015

BMI View: Consumer confidence has been building over the first six months of 2015, on the back of lowborrowing costs, subdued inflation, low unemployment and a hike in the minimum wage. We expect to seeorganic retail sales grow over the course of 2015 in local currency, however, the Israeli shekel hasdepreciated substantially against the US dollar, meaning that sales in USD will actually decline over theyear. Beginning in 2016 we see a recovery in USD terms, as the currency improves and over the longertermstrong household spending and favourable demographics will make Israel a top spot for retailcompany investment. In particular, growth of households earning over USD50,000 will more than doubleover the next five years, offering huge opportunities for luxury and higher-value goods.

We are currently forecasting real GDP growth of 3.1% over the coming year, up from 2.8% recorded during2014 and this will accelerate to 3.4% in 2016. While we forecast the economic growth to remain stable,pressure on the currency is key and this will result in a projected drop in spending (in USD terms) fromUSD125bn to USD123bn in the retail sector. Israeli's are still shopping despite the macroeconomicsituation, evidenced by Azrieli Group (Israel's largest shopping mall operator), reporting a 9% netoperating income increase in the second quarter of 2015 y-o-y. Strauss Group also saw organic sales growthexcluding foreign exchange effects during Q215, showing that retailers have been fairly insulated so far.

BMI Industry View
Retail SWOT
Industry Forecast
Headline Retail Forecast
Table: Total Household Spending (Israel 2012-2019)
Table: Retail Sector Spending, % Of Total (Israel 2012-2019)
Table: Headline Retail Sector Spending (Israel 2012-2019)
Table: Retail Sector Spending, % of GDP (Israel 2012-2019)
Retail Sector Forecast
Food, Drink & Tobacco
Table: Food, Drink & Tobacco Spending (Israel 2012-2019)
Clothing & Footwear
Table: Clothing & Footwear Spending (Israel 2012-2019)
Household Goods
Table: Household Goods Spending (Israel 2012-2019)
Personal Care
Table: Personal Care Spending (Israel 2012-2019)
Household Numbers And Income Forecast
Table: Household Income Data (Israel 2012-2019)
Table: Labour Market Data (Israel 2012-2019)
Demographic Forecast
Table: Total Population (Israel 2012-2019)
Table: Population: Babies (Israel 2012-2019)
Table: Population: Young Children (Israel 2012-2019)
Table: Population: Children (Israel 2012-2019)
Table: Population: Young Teens and Older Children (Israel 2012-2019)
Table: Population: Young People (Israel 2012-2019)
Table: Population: Older Teenagers (Israel 2012-2019)
Table: Population: 21yrs + (Israel 2012-2019)
Table: Population: Young Adults (Israel 2012-2019)
Table: Population: Middle Aged (Israel 2012-2019)
Table: Population: Urban (Israel 2012-2019)
Macroeconomic Forecasts
Economic Analysis
Expenditure Breakdown
Table: Economic Activity (Israel 2010-2019)
Industry Risk Reward Index
Middle East And North Africa Risk/Reward Index
Table: Middle East And North Africa Retail Risk/Reward Index
Israel Risk/Reward Index
Market Overview
Competitive Landscape
Department Stores
Consumer Electronics
Industry Forecast Methodology
Risk/Reward Index Methodology
Table: Retail Risk/Reward Index Indicators
Table: Weighting Of Indicators

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