Department stores in Israel was already posting declining sales and closing outlets prior to the pandemic, as operators in the channel have failed to reinvent themselves and are therefore increasingly perceived as outdated. These stores also tend to attract older generations as opposed to younger consumers who seek a more unique store experience and require a faster turnaround of stock or fashion-related items.
Another negative factor for department stores in Israel is that prices found for many products in the channel are considered higher than those offered by other retailing channels, and this has gradually reduced the large and growing segment of budget-conscious consumers. Moreover, department stores has increasingly faced strong competition from e-commerce, particularly online retail sites based abroad, which tend to offer lower prices on a very wide range of products.
Hamashbir 365 Holdings continued to dominate department stores in 2021 and is likely to retain its strong position over the forecast period. The retailer maintained stability in terms of outlet numbers during the pandemic while value sales struggled to recover due to significant declines recorded the previous year.
Department stores is predicted to record a weak performance over the forecast period as it struggles to remain relevant in an increasingly dynamic and changing landscape where e-commerce is increasingly top of mind for many consumers, particularly younger generations, when purchasing a range of different products. While leading player Hamashbir 365 Holdings began to sell some of its goods online via the platform Azriely.
While the number of outlets and overall selling space are predicted to continue declining, sales per outlet and sales per sq m are set to improve over the forecast period. This suggests that operators of department stores will try to identify strategies to attract customers back to stores by offering specific services, and by creating a more immersive customer experience to counter the low-priced benefit of more dynamic competitors including e-commerce.
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Understand the latest market trends and future growth opportunities for the Department Stores industry in Israel with research from Euromonitor International's team of in-country analysts – experts by industry and geographic specialisation.
Key trends are clearly and succinctly summarised alongside the most current research data available. Understand and assess competitive threats and plan corporate strategy with our qualitative analysis, insight and confident growth projections.
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Outlets selling mainly non-grocery merchandise and at least five lines in different departments, usually with a sales area of over 2,500 sq metres and arranged over several floors. Example brands include Macy’s, Bloomingdale’s, Marks & Spencer, Harrods, Sears, JC Penney, Takashimaya, Mitsukoshi, Daimaru, Karstadt, Rinascente.See All of Our Definitions
This report originates from Passport, our Department Stores research and analysis database.
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