Israel's Catering Industry Struggles Amid Prolonged Security Uncertainty

More than 1,100 days have passed since October 7, 2023, yet the Israeli catering and events industry remains severely strained. Companies hesitate to commit to events, operating costs continue to soar, and banks have restricted credit access. Industry insiders report that profit margins have eroded to the point where keeping kitchens closed is often more profitable.

"A few days ago, reports emerged that Iran might launch missiles to disrupt upcoming elections, and immediately two of my events were canceled," a senior industry executive shared. "Every headline like this paralyzes our phones for a week. Even when it turns out to be a false alarm, nobody is willing to take the risk.

High Vulnerability and Rising Costs

The catering sector was fragile even before the war. According to CofaceBDi and Dun's 100 indices, the sector ranks at peak risk levels, with the lowest survival rate in the economy. Central Bureau of Statistics (CBS) data shows that only 8.7% of hospitality businesses survive for 20 years. Since October 7, continuous security uncertainty has compounded these risks, hitting corporate catering particularly hard.

Despite fluctuating ceasefires, companies planning events one or two months ahead continue to withhold contract signatures. "The missiles stopped, but the talk continues. This has been going on for three years. These have been extremely difficult years, and many businesses simply did not survive."

Shachar Keren, a business consultant for restaurants, explains that food service requires extensive logistical planning days in advance. "Food business involves immense logistics, days of inventory preparation and planning," he notes. When situations suddenly reverse, preparations turn into pure loss: "If we suddenly enter another lockdown, all that money sitting on shelves or in refrigerators goes to waste."

Eroding Margins and Banking Restrictions

Despite a double-digit drop in business volume, prices have not decreased. Instead, they climb at a steady rate of about 6% annually amid the rising cost of living and expensive raw materials. An average meal that cost 80 to 90 shekels five years ago now reaches 120 shekels including VAT—a surge of 33% to 50%. Premium menus based on prime cuts like entrecote and picanha reach 230 to 250 shekels per person.

Labor costs have jumped concurrently. Kitchen and serving staff who previously earned 35 shekels per hour now demand and receive 55 to 65 shekels, representing a 43% to 57% increase. Kosher supervision wages have similarly risen from 35 to 55 shekels per hour, while strict kosher meat standards double raw material expenses.

Compounding these pressures, banks classify catering as a very high-risk sector, severely limiting credit access. While large enterprises with strong cash reserves absorb losses, smaller caterers struggle daily against financial constraints and unpredictable security headlines.