This is a peculiar affair of a flawed government-led venture to reduce the cost of living on consumer goods. It is about food and grocery products, retailing and brands. The affair entails an initiative to lower the prices of a ‘basket’ of food & grocery products through government-sponsored discounts. It even has an aspect of advertising. The way this venture or project rolled out has raised concerns about the nature of engagement between a government ministry and a large retailer. It seems that a series of flaws in execution of the plan have caused the project to derail.
The Ministry of Economy (& Industry) of the Israeli government launched a tender in January 2026 in which it invited food retailers in the country to submit their bids for offering a shopping basket of about 100 products at discounted prices. The criterion for winning was based not on prices of single products but on the total cost of the basket: that is, the winner of this competition would be the retailer that offers the whole basket at the cheapest cost to consumers. The retailer would commit to sell the products included at the discounted prices for six months (possibly extending to one year). It was named “The Basket of Israel“.
- It is a personal initiative originated by the Minister of Economy, Nir Barkat, who personally and proudly promoted it to the public. He seems to have put his reputation at stake on this project in a genuine effort to help reduce the cost of living in a field of frequently bought and consumed products, food & grocery. Barkat is a well-known, seasoned businessperson with years of experience in managing the investment firm of his family (together with his brother, Ely Barkat, who remains in charge of their investments).
However, it turned out that retailers operating different store formats were reluctant to participate. At least two discount retail chains that enrolled at first have withdrawn (Rami Levy HaShikma, Victory). They complained on a lack of fairness in the composition of the basket and the requirement to fix prices for at least six months, arguing that it was an unrealistic demand from a retailer in dynamic markets of today. Eventually only one retailer, Carrefour Israel, remained and made a bid — and won! Continuing with a single bidder was a starting fault by the Ministry of Economy (MoE) that produced a chain of following problems. Beyond the issues relating to the content of the basket and prices quoted, the reward guaranteed to the winner — an advertising campaign effectively funded by the government that discriminately favours the ‘winning’ retailer — is a major problem of public matter in governance (to be further discussed below).
The Basket of Israel became available to consumers in Carrefour stores in April 2026. Yet, it was soon revealed that it will be on offer in just 52 stores of the retailer (plus the online store) out of ~150 physical Carrefour stores operating across the country. Apparently, the stores participating in the project are the larger stores of Hyper Carrefour and Carrefour Market. Conspicuously, the popular neighbourhood stores of Carrefour City are not included (except one main store in a shopping centre in Tel-Aviv). It is odd because the City stores are the most convenient for access and commonly visited by residents-shoppers — this looks like an unfair exclusion (e.g., of older age consumers, students, non-car owners or non-drivers). (Important Note: The City stores which are recognised as supermarkets in Israel are between convenience stores and supermarkets of Carrefour in larger countries, where the supermarket is usually known as Market or Marché — the formats and locations of stores in Israel seem to be somewhat different, adapted to the local economy.)
The proposal of Carrefour Israel, to offer the Basket at the total cost of 1,098 NIS, was judged against a benchmark (1,405 NIS) and found satisfactory (22% lower than the benchmark). When compared specifically to estimates of total cost of the same basket in retail chains of different classes, the gaps appear to be larger: 34% lower than in leading food retail chains (1,670 NIS); 30% lower than in discount retail chains (1,576 NIS), and 28% lower than in low-cost chains (1,522 NIS) [Calcalist economics & business news, 11 February 2026]. The media quotes mostly the gap of 30% below the cost reference in discount stores. It is not clear which retail chains were included in each class (e.g., two recognised leading mainstream retailers are Shufersal and Carrefour Israel itself, so perhaps the comparison refers also to regular prices in the latter’s stores — this is not a trivial point considering that most stores of Carrefour in Israel are not included in this project).
- Technical Note: There have been salient shifts in the value of the Israeli shekel in recent months, mostly strengthening of the currency. That makes it a bit difficult to suggest a representative value of the shekel against key currencies like the US dollar or the euro. Therefore, equivalent values in foreign currencies for monetary values in Israel are not suggested in the text. I provide here two ‘typical’ ranges from the past six months just as general guidelines: USD/NIS 3.30 to 3.00; EUR/NIS 3.70 to 3.40. Please note also that all links in this post are to sources in Hebrew.
The content of the basket raises several issues. Firstly, the size of the basket, including ~100 product types & versions (SKUs), is inadequate. While the scope of products of various types & versions (stock units) can range from 3,000 SKUs in smaller stores to above 10,000 SKUs in larger stores, a basket of 100 SKUs would hardly provide a sufficient coverage of the variety in a store. The Basket includes indeed products from different categories (e.g., oil and sauces, rice and pasta, dairy, cleaning & pharma). However, the choice of particular product items may seem arbitrary (e.g., spaghetti size 8, and no other types such as penne). Michael Luboshitz, CEO of Carrefour Israel, explained in a report of Channel 13 News (“The Invoice Test”, 20 May 2026) that the MoE selected the products for being apparently sold the most (the retailer proposed the discounted prices).
As a consequence of the reduced (‘shortlist’) coverage, a shopping basket actually purchased is likely to include a relatively small portion of products from the Basket of Israel (e.g., 15 out of 50 or 11 out of 62 as found in baskets checked by Ch13 News). That is where the problem seems to be with the cost of the Basket: It does not reflect the baskets that shoppers usually buy, and therefore its cost does not represent the eventual cost they often get to pay. The problem is not merely in the limited choice of products in the Basket of Israel but more so in the choice from a variety of other products in Carrefour stores which fill the baskets that shoppers compose; due to their full prices, they raise the actual total cost to be paid.
Another report of Channel 11 (Kan) News (19 April 2026) noted that it is difficult for consumers in stores to understand which products participate in the Basket project among the products presented on shelf displays, and there may also be no match between the posters hanging around (flagging certain products) and the physical display. Furthermore, a selective, and sometimes puzzling, choice of product versions can be found (e.g., size packages, also see pasta example above), and even those included in the Basket are not necessarily available.
An issue raised by news reports of both Channel 13 and Channel 11 relates to the store-own brand of Carrefour. The report of Ch11 refers to the placement of a retail-branded product of Carrefour in display quite near a product discounted as part of the Basket project — it is done in a way that may confuse consumers in believing that the same discount of the Basket applies also to the Carrefour product (it can be of significance if the Basket’s product is missing). The reporter of Ch13, Noga Nir Neeman, makes a different argument: She draws the attention of CEO Luboshitz to the difference in prices between two products placed nearby: green tea of national brand Wissotzky at 15.90 NIS and the Carrefour-branded tea at 8.90 NIS (tea bags in same-size boxes). The reporter asked why the lower priced product would not be promoted regardless of the Basket of Israel? In fact, Carrefour prioritises products of its own brand all the time. Luboshitz argued, sensibly, that their goal is for consumers to come to a store for products in the Basket and thereof be exposed to the store-own brand of Carrefour (at the lower cost). There is indeed little point in further discounting products that are already cheaper and more affordable (especially government-subsidised essentials). The question should be different: Why are more expensive products of national brands not prioritised for discounts in the Basket of Israel or otherwise?
The prices of many products available in the Carrefour stores are more highly priced than in discount stores. Hence, it turns out that when consumers complete their shopping, their bill is more costly than if they would have purchased the same (or compatible) products in a store of a discount chain. Channel 13 News cross-checked the invoice-slips of baskets purchased either in a participating Hyper Carrefour store or in a Rami Levy discount store (20 of each retailer) against equivalent baskets in the competing store respectively. They found that in total, if just a few of the products of the Basket of Israel (or none) are chosen for purchase, the bill for a basket at Carrefour would cost similarly or more than in the discount store (Rami Levy).
If we at look at prices of single products in the Basket, discount rates offered range mainly from 10% to 50%. The deeper discounts seem to compensate for the ‘full’ and higher priced products customers may buy at the same Carrefour store, but as suggested above, the discounts cannot compensate sufficiently. The table below provides a comparison of the reduced prices of a selection of products in the Basket of Israel with regular prices of those products in a Carrefour City supermarket store. The table also aims to show the contrast between stores within Carrefour Israel’s network.
| Product | Price in Basket of Israel (1) | Regular Price in Carrefour City Store (2) | Discount Rate |
| Olive Oil Yad Mordechai 750ml | 27.90 NIS | 44.00 NIS | 36.6% |
| Ketchup Osem 750gr | 7.90 | 16.90 | 53.3% |
| Classic Persian Rice Sugat 1kg | 7.00 | 14.90 | 53.0% |
| Spaghetti 8 Osem 500gr | 3.90 | 7.90 | 50.6% |
| Cottage Cheese 5% Tnuva 250gr | 5.40 | 6.60 | 18.2% |
| Actimel Yoghurt Drink Strawberry Danone (Strauss) 16 mini-bottles pack | 24.90 | 42.90 | 42.0% |
| Green Beans Delicate Frozen Tnuva (‘Sanfrost’) 600gr | 13.90 | 13.90 | 0.0% |
| Grape Juice Tirosh Carmel 1l | 13.90 | 23.20 | 40.1% |
| Coffee Taster’s Choice 200gr | 29.90 | 39.90 (-5.00 = 34.90 (3)) | 25.1% |
| Cornflakes ‘Alufim’ (Champions) Telma 850gr | 17.90 | 25.90 | 30.9% |
Additional critical points can be raised: (1) Why are fruits and vegetables not included? — the apparent excuse is that they are VAT-exempt, but their prices can still get quite high, up to 30 NIS per kilogram; (2) Relatedly, too many products in the Basket are not considered healthy (42% according to Calcalist), including sweets and snacks as well as processed food products, and are carrying warning labels on concentrations of fat and sugar (also see Channel 13 News report); (3) Although the value of the national currency, the shekel, appreciated in the past year (~16%), the prices of imported products were not lowered to make them more affordable (e.g., hard and soft cheese varieties, chocolates — their prices are twice and above their respective prices in Europe) — the responsibility for this falls with the retailers, the importers, but also with the government that offered no remedies to this situation, including not via the Basket of Israel.
The advertising campaign that accompanies the project is a story in itself. It includes ads broadcast on TV (in a few versions) and on radio and promotional signage or posters in participating stores of Carrefour. The video ad presents a blend of humour followed by a serious claim about fairness, transparency and signaling out the chain Carrefour offering the cheaper basket in collaboration with the Ministry of Economy (tagline “We Stopped Being Suckers”). The ads feature a well-known Israeli comedian (Eli Yatzpan) who earned 238K NIS for his role (TheMarker, economics & business news, 28 April 2026). In the final scene he stands in front of a Carrefour store with a large display of its logo sign. In-store, posters are seen spread all over, some declaring “The Ministry of Economy Determined Carrefour the Cheap Basket of Israel”; the hanging signage and product-price tags were designed and produced by the MoE. The whole campaign is valued at 50 million shekels for a basket that is arguably riddled with problems of its composition (Mako Channel 12 News, 12 April 2026). This is an extraordinary privilege granted by a government to a business firm, whereby producing the advertising campaign on behalf of Carrefour. Moreover, it seems an inappropriate intervention in the market competition between retailers, and in the marketing and advertising operations that should fall in the responsibility of the business. This makes it look like collusion (Barkat blamed the other retailers that refused to participate with collusion, TheMarker). The MoE could grant Carrefour, for instance, with funding to aid in providing enhanced services and better terms to consumers in peripheral areas.
Barkat presented the Basket of Israel on TV as “a project quite out of the box, bold one”. Luboshitz the CEO of Carrefour sounded surprised, saying he did not understand the (public) storm that erupted, and added, somewhat cynically, “how come I was not presented as a Robin Hood” (Channel 13 News as above). But the problems are real. Consumers are mystified and taken amiss by the offers made in the project of The Basket of Israel as experienced in stores (and on TV). Angry and bitter reactions in social media shown in this report (also in others) claimed it was “a joke”, that the MoE and Carrefour “should be ashamed”, asking if that was their solution to the high cost of living. The report of Channel 11 News was titled “The Bluff of Carrefour”. Negative reactions were also made to the advertising campaign (‘why should the public pay for it’). The conclusion of the report on Channel 13 News was that if consumers concentrated on buying only products from the Basket, they might be able to save several dozens to hundreds of shekels a year, but in purchasing a greater variety of products in their basket, buying it at Carrefour would not be cheaper, and most likely not save consumers thousands of shekels as promised.
- Note: Since the retail chain of Carrefour Israel is operated by a franchisee (Electra Consumer Products), this affair will probably not have much impact on the French-based company Carrefour or its customers in other countries, but it will neither look like a positive contribution to its record or image.
The idea behind The Basket of Israel seems positive, at least at a conceptual level. Yet the plan was flawed on several aspects, and more problems arose during its execution. It looks like a symbolic gesture, a ‘compensation’ for higher prices of other products, which misses its objective — like putting a bandage on a wound (cost of living) that needs a much more serious treatment. At the end, the two parties, the Ministry of Economy and Carrefour Israel, appear more interested in the publicity of their venture than in reducing the cost of living.
Consumer / Shopper / Customer Behaviour 