Jeans in Israel

2020 IMPACT

Home seclusion trend and longevity of jeans reduces demand in 2020

Although jeans are considered a basic piece of clothing and form part of many Israelis’ wardrobes, the category suffered a severe blow in terms of demand in 2020. The pandemic-induced lockdowns and movement restrictions meant that many consumers did not leave their homes, and therefore, were less likely to invest in a new pair as they were unable to socialise for long periods of time.

Ongoing declines in unit price due to increasing competition and popularity of e-commerce

Unit prices of jeans were also declining pre-pandemic in Israel due to strong competition between local retailers and online players, which negatively impacted the value of the category. The number of promotional sales is increasing each year and are stretched to a longer period in order to encourage purchases.

Leading players lose ground to smaller players and pure e-commerce players such as ASOS

Fox Wizel retained its leadership of jeans in 2020 offering American Eagle Outfitters and Fox, while benefiting from its e-commerce site Terminal X. Although like all major players, Fox lost ground and value sales in 2020 due to reduced demand for jeans, it has continued to enhance its online activity and understanding of market changes.

RECOVERY AND OPPORTUNITIES

Standard jeans set to record strongest demand but overall category will struggle to fully recover by 2025

While jeans is predicted to experience a marginal upturn in demand from 2021, supported by the economy and standard price segments, it will struggle to fully recover to pre-pandemic levels in both volume and value terms (at constant 2020 prices) by 2025. However, as the largest price segment, standard jeans is set to record the strongest volume growth, since it is considered basic apparel, whilst still offering decent quality and affordable prices.

Ongoing declines for higher price segments

Premium and super premium jeans experienced the weakest performances in 2020 as increasingly price-sensitive consumers were unwilling to pay for expensive jeans when they were confined to their homes. However, this was a continuation of a trend already noted pre-pandemic, as brands within these price segments tend to be cheaper outside of Israel (Europe and the US) and therefore increasing travel over the review period had led to reduced demand in Israel.

Further shift towards e-commerce likely

The shift towards e-commerce is likely to continue over the forecast period by offering convenience and competitive prices, while supporting the relevance of smaller brands which would struggle to enter mainstream retailers. Moreover, this shift will enable a higher number of international brands to enter the market at low risk.