Cofix is a new coffee shop in Israel. They are talking about opening 300 branches across the country, but they only just opened one so far, in Tel Aviv, this past week.
What's so special about Cofix that they deserve mention?
Cofix is selling everything in its store for 5 NIS. Everything - coffee, pastries, sandwiches. Everything for just 5 NIS.
Cofix claims that the chains in existence have been ripping us off, charging ridiculous amounts for coffee and burekas and sandwiches. The owners of Cofix want to show that they can charge a small amount and still make a profit. They have lines out the door. And in just one week they have the large chain coffee shops scared.
Just the other day a couple owners of some of the other chains spoke out about how the food at Cofix is low-quality and serving good quality costs more, with a whole bunch of other excuses for their high prices. Cofix is currently one shop - they could easily ignore it and see if they find a way to survive a month or two before relating to them. There is no way one coffee shop can possibly be making a dent yet in the sales of chain shops with tens and hundreds of locations, though in the future it could be a concern - if they actually survive and show they can make a profit at that price.
And now Aroma has announced that they are soon going to be cutting the price of coffee by a few shekels per cup. The Director of Aroma just said that they wont be able to drop the price to 5 NIS like Cofix, but the customers should not feel as if they are being taken advantage of.
One could make a study based on this situation. I find it startling how quickly a little bit of real competition can affect the market.
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