Starbucks Slayer: Upstart Israeli Chain Cofix Opens Moscow Café, Undercutting Starbucks Prices

An Israeli café chain has sparked a coffee price war, offering consumers a cup of joe and other café items for a fraction of what Starbucks charges.

Cofix Group Ltd., which opened in 2013 and has grown to 152 sites in Israel, opened a café in Moscow Monday. Cofix is selling its items for 50 rubles (80 cents). Starbucks sells espresso in Moscow for 120 rubles ($1.93) and cappuccino for 245 rubles ($3.95).

In Israel, the Cofix charges $1.32 for each item, making Moscow a real bargain.

Founder Avi Katz said he is hoping to have 100 Russian locations by mid-2018 and 1,000 within five years. He said he is considering the United Kingdom for his next market, Bloomberg reported.

“In Russia, it costs 20 rubles [32 cents] to make a cup of coffee at home, while most coffee shops are offering it at about 200 rubles [$3.22]: This is probably the widest difference in the world,” Katz told Bloomberg in a Moscow interview. “I am bringing in the new market, so that people who used to drink coffee only at home can afford it in a cafe.”

The Jerusalem Post said the Russian menu will include carrot juice, blintzes and a variety of tea. The first Cofix in Moscow opened in Red Square in a joint venture with a private company, Globes reported. Two more are slated to open next month, and Katz said he hopes to have 300 stores in Moscow alone.

Cofix shops focus on pick-up and go, in contrast to Starbucks, which offers seating that allows customers to sit and work for hours.

Starbucks first opened in Seattle in 1971 and had 22,519 stores around the world as of June 28, 2015. The company also sells its coffees and teas in bulk from its stores, as well as through grocery outlets and other retailers.