Beginning of the End? Cofix Copycat Raises Prices to Six Shekels

Is the era of five-shekel coffee coming to an end? It is at Cofizz, a chain that competes for the five-shekel snack market with Cofix. The company has announced that it is raising the price on its food snack items to six shekels. The price of coffee, and other hot and cold drinks, will remain at five shekels for now.

Established three years ago, Cofix, the original every-item-five-shekels chain, has quietly become a major phenomenon in Israel. Starting out with a small coffee stand in Yerushalayim, the chain has expanded to over 150 branches, with a menu that sells everything for five shekels – “everything” included personal-sized pizzas, muffins, croissants, salads, sandwiches, soups, sushi, and on Thursdays and Fridays, vegetarian cholent.

The chain also revolutionized the way coffee is sold in Israel; today, bakeries, coffee shops, and entire chains have adopted the five-shekel menu. Coffiz, the biggest “copycat” chain with 50 branches, was established two years ago, and its menu is similar to that of Cofix’s.

But the prices on that menu will soon be different from that of Cofix’s. Speaking to Yediot Achronot, Cofizz CEO Amir Amsalem said that costs were rising, and the extra shekel was necessary. “We didn’t want to reduce the size of our servings, and I want to make sure our franchise holders are not squeezed,” he said.

Among the reasons for the price rise, which will affect everything the chain sells except for beverages, is the increase in the minimum wage, which went into effect on Sunday. “When we opened in 2014, the minimum wage was NIS 24 per hour. Now it is NIS 29 per hour, but we have to pay more, because few people will agree to work at that wage. Gas prices have risen, rents have risen, even plastic bags in the supermarket now cost money. An extra shekel is not a big deal.”

Cofix has not yet announced any price increases. Amsalem said that he could not comment on their policies, “but I am not sure they work with franchisees as we do. I treat them like family. The people I work with have staked their parnassah on my business, and I want to make sure they can live comfortably.”

Although the menu at Cofix remains at five shekels, the company has experimented with offering higher priced items – at its Super Cofix chain of grocery stores. There, too, the company sells most items for five shekels, but it recently added numerous “bigger ticket” products, like cereal and bathroom tissue, for 10 and 20 shekels. Amsalem said that this was a response to price increases as well. “They have a lot of expenses in their stores, which are mostly in city centers,” Amsalem said of Super Cofix. “Also it is an issue of customer retention. Customers who come in want not just the smaller five-shekel items, but bigger ones, like laundry detergent. If the stores don’t sell them, they will go somewhere else.”