As rent and manpower costs rise and legislation intensifies, the number of full-service restaurants is falling. Players prefer to open lower cost and lower risk outlets.
Fast food was rebranded as “street food” during 2018. Once unhealthy and low quality, fast food is becoming more sophisticated and of higher quality.
As the cost of manpower rises due to new regulations, more limited-service establishments use technology to cut labour costs. McDonald’s and Burgerim and other chains have introduced kiosks where customers can place and pay for their orders, thereby reducing the number of employees needed per shift.
With well-established outlets in strategic locations and strong brand familiarity, McDonald’s Israel is the long-time leader in limited-service restaurants. However, consumers still perceive McDonald’s products as unhealthy and of low quality.
The leading players uses frequent new product launches and marketing to keep the brand fresh and increase the variety of products on offer to consumers. For example, in 2018, McDonald’s launched MyMac, which allows customers to create their own dish, thereby giving them more control over what they eat.
Third party players have become a main factor in profit erosion for restaurants. Two third party players dominate the category: Cibus and Ten Bis.
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This industry report originates from Passport, our Consumer Foodservice market research database.