The Cofix café chain, famed for selling takeaway coffee and sandwiches for five shekels each, will begin in the coming weeks to sell items that are not food or drink. TheMarker has learned that every week Cofix will be selling one item at a significant discount compared to its price at other sales points. Among the first items to be sold for five shekels: a stainless steel thermal cup, six glasses for cold drinks and six mugs for hot drinks.
At first Cofix will probably focus on selling items related to the worlds of food and coffee, and later will start to sell, at low prices, items related to areas close to founder Avi Katz, a former owner of the Kfar Hashashu’im toy stores, Vardinon textiles and Sheshet housewares. Cofix is expected to sell toys, baby products and housewares for five shekels, items which are sold at far higher prices in specialty stores. In cases when the items are more expensive and cannot be sold for five shekels, they will be offered at a discount price of a few dozen shekels compared to 100 shekels and more in the specialty stores.
Katz is also examining the possibility of opening a chain of bars, which would sell alcohol at significantly lower prices than those offered in bars today. It was also learned that at first Katz wanted Cofix, which sells coffee and foods at a uniform price of five shekels, to turn into a chain of bars in the late evening and at night, selling alcoholic drinks at a uniform price of five shekels, to expand the chain’s volume of sales and offer a cheap alternative to a young target audience. But apparently he has decided to postpone the plan for now because the Cofix cafes, in their present format, cannot get a permit to sell alcohol, one reason being their size and the number of seats.
Now Katz is examining a way to overcome the problem and sell alcohol at discount prices, apparently by establishing bars under a different brand name. It’s possible that those bars will be based mainly on standing room and include a relatively small number of seats.
Another problem for Katz is the high taxes on alcoholic drinks. In July 2013 the reform in alcoholic drinks came into effect, and sales tax on alcoholic products soared to 105 shekels per liter of alcohol instead of 84 shekels until now. The tax on drinks is actually now being calculated according to the percentage of alcohol they contain, which means that the prices of the cheap brands of alcoholic drinks - such as vodka or arak - have soared, while the prices of the more expensive brands have actually dropped.
According to the government, the objective of the reform, aside from the tax money that will enter its coffers, was also to keep alcoholic drinks away from teens, who will find it difficult to pay the new prices. In the industry some claimed that if Katz decides to lower the prices of alcohol, that is liable to harm his image.
Last year saw the beginning of a new trend of bars that sell alcoholic drinks at a fixed price in various “all you can drink” plans. Keren Aharoni, one of the owners of the Rotcha bar on Rothschild Boulevard in Tel Aviv, which sells bracelets that give the purchasers unlimited drinks at various price points, says that it’s possible to sell alcohol at lower prices if the volume of sales grows accordingly.
“We sell ‘bottomless’ beer and arak for 69 shekels; vodka, gin, rum, etcetera for 89 shekels, and more,” she said. “That means that someone who drinks three to four glasses on average in an evening pays 15-30 shekels for Red Bull vodka, as compared to about 50 shekels in Tel Aviv bars; and 17.5 shekels for a glass of beer compared to 25-30 shekels a glass in Tel Aviv bars. It’s not that the bar owners earn a lot of money - the expenditures on rental, manpower and so on are very high. But the reason why I can sell cheaper is the volume, because today people are looking for a place where they can sit and enjoy drinks and still not spend a lot of money.”
Avi Katz responded: “I’m examining a lot of options.”