Full-Service Restaurants in Israel

PROSPECTS

Full-service restaurants facing challenges in 2019

To the benefit of consumer foodservice overall, consumers are dining out more frequently. But rising costs and other issues are continuing to hamper the performance of full-service restaurants in 2019.

Restaurant-goers shifting to more convenient alternatives and new dining experiences

For a number of reasons—rising meal prices, a shift by consumers to quicker, more convenient meal alternatives, consumers’ increasing desire to acquire experiences, among others—the appeal of full-service restaurants has declined in recent years, and that trend continues in 2019. In fact, the extensive and sophisticated menus and more formal atmosphere that many full-service restaurants continue to offer are considered to be outdated and unengaging, particularly by busy younger consumers who instead demand convenience.

Full-service restaurants increasingly obtain alternative kosher certificates

There is a growing demand amongst Israeli consumers for the products and services of kosher full-service restaurants. But that demand has been stifled somewhat due to the process of obtaining the rabbinical kosher certificates restaurants need to attest to kosher quality being so expensive; in the case of some restaurants the cost of the process is prohibitively expensive.

COMPETITIVE LANDSCAPE

Burgas Ltd holds top spot in 2019 but Japanika Ltd records significantly higher growth

Burgas Ltd surpassed full-service restaurant leader Japanika Ltd in 2017 to become the category leader, and in 2019 Burgas Ltd, with a value share of 2% it continues to hold the leadership position in the highly-fragmented category with a value share of 2%. Burgas Ltd’s chains Moses and BBB are well-known and their numerous outlets can be found in popular, busy locations.

Responding to new consumer preferences, full-service restaurants continue to streamline their menus

Reflecting the ongoing changes in consumers’ preferences and their current expectations while dining out, many full-service restaurants are uncomplicating their menus and simplifying the dishes they serve. Indeed, when dining out, a growing number of Israeli consumers are now demanding dishes that are less complex and that simply highlight selected fresh and natural ingredients.

Third-party delivery players proving vital to full-service restaurants

In 2019, third-party delivery players continue to significantly boost the performance of full-service restaurants. Despite the high commissions they are charged, a significant and growing number of full-service restaurants now consider it necessary to commit to collaboration with third-party delivery services to ensure value sales growth.

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