The much lamented 5 shekel ($1.43) cup of coffee is back at Cofix, but it’s no longer alone on the menu.
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The chain of cafes that pioneered the idea of a low-single-price for all its offerings said Monday it is now going to be offering drinks and foods for between 8 and 12 shekels as well, as part of a strategy to win back profits as well as the customers it alienated when it raised the single price on its menus to 6 shekels in February.
Back then, Cofix came under fire for reneging on its promise to always charge 5 shekels, but founder and controlling shareholder Avi Katz said he could no longer make a profit at that price.
Monday’s move brings back the old price for a host of basic items on what Katz is calling the “original” menu, including a small cup of coffee, small sandwich or salad and a four-piece sushi tray. But the menu will include new items, such as a large cup of coffee and large sandwich for 8 shekels.
Anyone who wants to splurge on a six-piece sushi tray, including salmon, or a large salad, will have to fork over 12 shekels. A 15 shekel children’s meal coming soon.
Cofix CEO Yaki Vadmani said the average price on the menu was just 5.40 shekels, on the assumption that most items would sell for 5 shekels. Still, Katz said the higher-priced items should offset the impact of lowering its original menu price to 5 shekels.
“We’re bringing back the original menu and it will remain at 5 shekels. What we are doing is faithful enough to the original promise of a flat price of five shekels,” Katz told TheMarker. Asked whether he would promise no further changes in the chain’s prices, he said, “I’ve already learned that you can’t promise that prices won’t change because you can’t know what will happen.”
In addition, Cofix is launching a catering business to serve lunches at offices and factories as well as a Cofix International unit to sell rights to the concept overseas.
It’s too early to tell whether the variable-price menu will bring back customers, but on Monday investors seemed to be happy with it. Shares of Cofix group, which have fallen 40% in the last six months, ended the day up 4.2% at 9.17 shekels on the Tel Aviv Stock Exchange.
February’s price increase didn’t turn around the business, as Katz had expected. In the third quarter the company recorded a loss of 832,000 shekels, compared with profit of 1.9 million shekels in the third quarter of 2016.
Even though prices were raised 20% and Cofix had more outlets, sales were up just 5.2%.
Cofix also operates a chain of supermarkets called Super-Cofix, to which Vadmani attributed the losses, but he said the grocery business was losing money because it was so new and still in development.
At a press conference Monday, Katz offered no apologies for Cofix’s business performance.
“In the last two years we opened a factory and a chain of stores in Russia — 30 supermarkets. Did anyone think that this wouldn’t take resources and that we wouldn’t have one or two difficult quarters? Cofix has shareholders’ equity of 46 million shekels,” Katz said.
Last week TheMarker reported that Cofix was in talks about Rami Levy taking a stake in Super-Cofix and rebranding the 30-store chain as Rami Levy in the Neighborhood.