Aroma Espresso Bar will soon raise its prices by an average of 5% because of rising food prices. Aroma owner Yariv Shefa said, "Commodities prices have been rising for a long time, and we've naturally had to raise prices for consumers. We'll update our prices in our new menus right after Passover."
Aroma has 86 branches in Israel and more overseas.
Cafe Cafe owner Ronen Nahmani said rising prices have eroded profit margins. "The cost of food used to amount to 27-28% of turnover, but it has risen to about 30% in the past year because we couldn’t roll the higher prices onto customers. This has cut our profit margins by 2-3% of turnover, which is a large amount that should go to operators or franchisees. We raised our prices twice by a total of 6% in the past year. Despite the gradually rising prices, we couldn’t roll over all of this to customers."
Cafe Cafe has 46 branches in Israel.
Nahmani added, "We're trying to avoid another price hike, because we can live with what we've got. A cafe isn't a restaurant and we don’t want a customer who sits down and wants to eat to be presented with a price list of a restaurant, but to feel that he's eating at a cafe at cafe prices."
Shefa believes that rising prices will not affect consumption at cafes. "Prices are rising throughout the market, and everyone is suffering equally," he said.
Published by Globes [online], Israel business news - www.globes-online.com - on April 27, 2008
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