Israeli retailers are under severe pressure from the impact of the country's security crisis.
The terrorist bombing of a shopping centre on Monday was preceded by news that Super-Sol, one of Israel's biggest supermarket groups, had made an operating loss for the first time.
Super-Sol revealed that sales for the first quarter fell by 11.2 per cent to Shk1.79 billion (£200 million) and same-store sales fell by 14.6 per cent. The operating loss was Shk4 million(£500,000), against a profit of Shk79 million (£10.6 million) for the previous comparable period.
Figures released by the Israeli Central Bureau of Statistics showed average wages decreased by 6 per cent in real terms in January and February 2003. The fall led to a decline in consumers' purchasing power.
Super-Sol acting chief executive Chaim Elkan said: 'The deterioration in the economic and security conditions in Israel has had a negative effect on the company's results. The company's results of operations will continue to be impacted by the above.'
Super-Sol has pursued a strategy of converting some stores to cheaper formats to try to combat the recessive economic conditions.
Analysts said the fall in Super-Sol profits was caused by both internal and external factors.
Blue Square, another leading Israeli grocer, was expected to announce figures as Retail Week went to press.
Israel has been the focus of terrorist attacks since the outbreak of a Palestinian uprising more than two years ago. Monday's bombing was the fifth targeting Israelis within two days.