Consumer Spending Plummets 27% in the First Week of the War with Iran

Consumer spending in Israel dropped sharply during the first week of the conflict with Iran, as Israelis heeded Home Front Command instructions and limited their movement. According to data published by the Automated Bank Services Company, credit card payments fell by 26.9%, totaling 7.4 billion shekels, compared to 10.1 billion shekels the previous week.

The company, which manages Israel’s national debit card payment infrastructure, said the figures reflect the public's swift adjustment to the wartime reality — including business closures, delivery delays, and travel restrictions.

Restaurants, Clothing, and Travel Hit Hard

Spending in key sectors collapsed:

• Restaurants, cafes, and fast food saw a 37.7% drop, with total spending falling to 489.9 million shekels from 799.6 million.

• Clothing and footwear recorded the most significant decline: 69.2%, dropping from 594 million shekels to 182.9 million.

• Fuel purchases declined 28%, reflecting the sharp drop in travel and commuting.

E-Commerce and Deliveries Also Decline

While some online shopping and food delivery services initially picked up, the overall sector still experienced a 26% decline. This was due to:

• Limited delivery services

• Reduced courier availability

• Longer wait times and lower consumer patience

International online shopping also decreased, driven by the closure of Israeli airspace and subsequent disruption of imported goods and deliveries.

Food Retail Sees Growth Amid Crisis

Some essential retail categories showed resilience:

• Supermarket chains recorded a 21.1% increase, totaling 1.6 billion shekels, up from 1.3 billion the previous week.

• Butchers, fishmongers, and delicatessens saw a 7% rise in credit purchases.

This trend reflects consumer prioritization of essential supplies, particularly food.

Pharmacy and Electronics Purchases Decline

Despite being categorized as essential, pharmacy chains saw a 16.8% drop in credit spending — from 286 million shekels to 238 million. Industry sources say consumers are visiting stores briefly, focusing on immediate needs. In response:

• Some chains limited baby formula purchases to two per customer.

• Prescription refills were restricted to one-month validity instead of three, to preserve stock levels.

Spending at electronics and appliance stores fell 32.8%, from 623 million shekels to 419 million. While shelter-related items like fans and radios saw a spike in demand, high-value items such as TVs and washing machines saw major declines.

Aviation Industry Sees 57% Collapse in Transactions

The aviation sector was among the hardest hit. Transactions at Israeli airline companies plummeted by 57.3%, from 110 million shekels to just 47 million, following widespread flight cancellations and airspace closures.

Despite the steep week-over-week decline, the Automated Bank Services Company noted that spending levels during the current conflict (Operation 'With a Dog') were 13.9% higher than during the first week of Operation Iron Swords in October 2023 — when spending amounted to 6.5 billion shekels.

This suggests that economic resilience has improved, even as Israel faces a new and severe military escalation.