Pizza. Popular food in Israel
Pizzeria market deemed risky
Industry considered unprofitable with high risk level due to low entry barriers, Credit Information Association says
Although pizza is considered to be a popular food in Israel, one out of five neighborhood pizzerias closes within two years of its opening, a survey conducted by the Credit Information Association (CIA) of the Gaon Capital Markets group revealed.
There are currently 1,200 pizzerias in Israel, which generate approximately NIS 270 million (about USD 60 million) a year. The frozen pizza market is estimated at NIS 130 million (about USD 29 million), and in total the market generates an annual NIS 400 million (USD 89 million).
The neighborhood pizzerias generate about NIS 95 million (about USD 21 million), while the pizzeria chains, including Domino's, Pizza Hut and Pizza Meter, generate some NIS 175 million (about USD 39 million).
According to the CIA, Israelis like fast food. About 80 percent of all Israeli men eat fast food and prefer hamburgers and pizza, compared to 70 percent of Israeli women. Most women, however, prefer health food such as salads and vegetarian meals.
About 85 percent of Israelis who like fast food often eat pizza. About 55 percent buy readymade pizza, and 27 percent of them buy pizza at least once a week.
Israelis prefer deliveries
The survey also revealed that Israelis like to have pizza delivered to their home or office. About 60 percent of pizza sold in pizzerias is through deliveries.
CIA economists warn that the pizzeria industry has been considered unprofitable for many years. The risk level of opening a neighborhood pizzeria is very high due to low entry barriers.
According to economists, only a NIS 50,000 (about USD 11,000) investment is needed for opening a pizzeria. The financial investment is not too high, the ingredients for preparing pizza are very cheap - it's only the cheese that makes the manufacturing process more expensive.
