Last year was another bad one for Israel’s restaurants, but for the beleaguered industry, brunch may be coming to the rescue.
An established restaurant institution in the United States and Europe, in Israel more and more restaurants have added it to their menus over the past year alongside breakfast and business lunches, especially on weekends.
“Brunch is the hot new thing in the restaurant business and its very profitable,” said Idan Spivak, a culinary public relations man for Blender Communications. “It’s become a Friday morning ritual. All over the country you see people reserving weeks in advance, even though it’s not a cheap meal – about 100 shekels [$28.50] per diner.”
Compared with a typical Israeli breakfast of an omelet and a few small salads, brunch offers a richer, more luxurious dining experience while letting the restaurateur show the best of his menu.
“Customers perceive it as very rewarding, because Israelis love abundance and the possibility of getting second helpings for free – and most brunch menus give it,” he said.
The brunch phenomenon comes as Israel’s restaurants marked another year of declining business in 2017. According to the Association of Restaurants and Cafes, turnover fell 0.8% and the number of outlets declined 1.5%. More restaurants closed than opened last year. And many of the new ones went out of business in six to 10 months.
The industry’s woes were compounded by a government decision to impose a 20% tax on foreign workers that’s paid by the employer, not deducted from the worker’s gross salary. Foreign workers account for a big part of the kitchen and cleaning staff and the tax has caused costs to balloon.
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Carmel Broder, a food industry consultant for the firm 2Takeaway, estimated that in a restaurant where the brunch menu works, it can boost turnover by 20% because it adds a fourth round of meals to breakfast, lunch and dinner that fills seats.
The only other major added cost is the food itself, which typically comprises 30% of a restaurant’s total costs, so brunch can boost the bottom line by 14%, she said.
“Because profitability in our industry is eroding so that today we’re talking about average pre-tax margins of 10% to 12%, restaurants are looking for profitable solutions and ways to boost revenue – and this [brunch] is definitely one of the ways,” Broder said.
Bellboy, a Tel Aviv cocktail bar that also serves food, launched a brunch menu two months ago and it’s been a big success despite a steep 120 shekel tab without any extras like dessert.
“Until then we only opened at 6 P.M. so we’re getting sales we never had before and they don’t come at the expense of evening sales,” said Ariel Leizgold, a co-owner.
Chef Ran Shmueli of the Tel Aviv restaurant Carlo and a pioneer in the Israeli brunch scene, said he charges 80 to 90 shekels a person, which he said isn’t high, but the experience often brings customers back for dinner.
“Brunch adds 10% to 15% to a restaurant’s turnover. Both on Fridays and Saturdays, it draws 250 to 300 people,” he said, but hastened to add: “You have to take into account that it requires a lot of work – they require a lot of offerings, people sit for a long time, there are added food costs and you have to cope with a lot of diners. The bottom line is it’s good business, but there’s a lot of effort and headache, too.”