Shake Shack gains first foothold in Israel

• Published date: 05 March 2024
• Author: Shira Sapir
• Publication title: Globes (Rishon LeZion, Israel)

In recent years, the hamburger industry in Israel has grown rapidly, and estimates are that it generates about NIS 2.5 billion annually. Shake Shack's entry was made possible following a business initiative in 2021, when a group of investors led by Poalim Equity, Harel Insurance and Finance and Harel Wiesel purchased 49% of the catering arm of Yarzin-Sella Group, at a company valuation of NIS 100 million

The location where the chain chose to launch is not accidental. "Dizengoff Center has become Israel's Times Square, and the preferred location for international brands," notes Uri Ovrutzky, a lecturer in innovation at Netanya Academic College, who visited the place and tried variety of dishes on the menu.

Ovrutzky stresses the branding thinking of the chain, which invests in local connection. "Tel Aviv is reflected in the icons, the menu and the shirts of the employees, and this is compared with McDonald's, for example, which when it launched tried to present itself as American.

"Is this the next thing, and will Israelis take to it in particular? In the current economic situation, the answer is no. Tel Avivians who live in the area will come. The prices are also relatively high for fast food in Israel, and you see reactions to this on social networks. The buzz, as Wiesel knows how to do, is much greater than the sum of its parts. But unless price adjustments are made, I don't see this vibe continuing, and it will remain another colorful option.

"Curiosity led many there, but a week after the opening there is already a forced line that is built like a path with red tape. This is not the opening volume of McDonald's in Israel, which had to close after two hours because they ran out of buns. Are we facing a revolution? In my eyes, no. The Israelis are already at the peak of the hamburger...