Israeli food firm G. Willi-Food has announced it does not expect to hit budget for the remaining quarters of the year after witnessing a sharp decline in half-year profits.

G. Willi-Food attributed the fall in profits to “belt-tightening” among consumers in its home market and challenges on the political front which are impacting the Israeli economy.

The firm reported a decline of 28.4% in net profit to NIS11.5m for the half year ended 30 June. Operating profit also fell 31.3% to NIS12.0m. Sales were down 0.5% to NIS174.2m.

In the second quarter, the firm reported a decrease in net income by 43.9% to NIS4.4m. Operating income fell 32.8% to NIS5.6m. Sales declined 6.2% to NIS79.2m

Zwi Williger, chairman of Willi-Food, said: “Consumption of food products by Israeli consumers continued to decline sharply for the second quarter in a row.

“The Israeli economy has been negatively impacted in the third quarter by … military action launched by the State of Israel on July 8, 2014 in the Hamas-controlled Gaza Strip. As a result, we expect economic uncertainty to continue which, coupled with other changes in the Israeli market and ongoing consumer pressure for price reductions, will likely negatively affect our results in near future. As a result, we do not expect to meet our budget for the third and fourth quarters of 2014.”

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Williger added the firm would look to “better manage” its expenses in order to provide consumers with the “lower-cost products they desire” in a bid to maintain its customer base.

Shares in G.Willi Food had fallen 2.34% to US$7.23 per share today (12 August) at 14:54 BST.