Israel's appliances market has shrunk from NIS 6.5 billion (approx. U.S. $1.4 billion) in consumer prices in 2000 to NIS 3.5 billion (approx. $764 million) in 2004, says Sakal chairman and CEO Solly Sakal.
Sakal operates, among other chains, a chain of appliance stores and duty-free appliance stores at Ben Gurion International Airport in Israel. Sakal's appliance sales are estimated at NIS 500 million ($109 million) a year.
Mr. Sakal added that the past 2 years have been very hard for the appliances industry, especially for retailers. The reduction in purchase taxes was intended to boost imports and sales, but appliances sales nonetheless have fallen 25 percent in financial terms and 15 percent in quantitative terms. Mr. Sakal attributes this mainly to the recession that lasted from late 2001 to late 2003.
"I thought the purchase tax should be cut gradually," Mr. Sakal said. "It was very good for consumers but terrible for market players. All retailers were hit hard and are losing money. The market has become risky, and we, the chains, are afraid to sell. It's almost impossible to grant credit in the appliances industry. The industry is now very risky."
Purchases prices per unit have plummeted during the past 2 years. Television prices are down by an average of 35 percent, and DVD prices by 70 percent. (Globes online)
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