For almost two decades, Erez Davidov’s Bezalel Market stall has been a go-to spot for budget-friendly swimwear, catering to customers of all sizes and ages.

The stall at the open-air pedestrian market has a prime spot in the heart of Tel Aviv, nestled off King George Street near trendy Sheinkin Street and a stone’s throw away from the Carmel food market.

The period just before the Passover holiday, which begins next week, normally marks the start of Davidov’s busy season, with the warming weather bringing shoppers looking to renew their beachwear for the summer, he said.

During a recent visit to the store, with the war against Iran more than three weeks old, Davidov, 36, was sitting on an old black office chair waiting for shoppers, who were nowhere to be seen.

It’s not just that consumers are avoiding shopping with missiles flying overhead. It’s also that they have nothing to shop for, with beaches closed and international travel shut down.

“Business has all but disappeared,” said Davidov. “Many Israelis, who booked a vacation or were hoping to travel during Passover, had their plans canceled because of the war.”

“This also hurts my business because no one needs to or wants to get a new swimsuit for the season as they are not going away and pools are closed,” he added.

Though initially closed by emergency guidelines at the start of the war, Davidov’s and other nonessential businesses have since been allowed to open up. But many of them are barely functioning, lacking both customers and workers. The hospitality and the food and beverage industries are particularly hard-hit.

Roughly one in four businesses is closed, partially closed, or working at minimum capacity, according to a March survey by the Central Bureau of Statistics sampling 1,779 businesses across Israel. Nearly half of all hotels, event halls and restaurants reported being shut down or barely functioning, the survey found.

Among small businesses with 5 to 10 employees, 31% reported that they were shut down or barely working, thanks to staffing shortages and school closures. Four percent of large firms said the same.

Almost half of the business owners participating in the survey cited the closure of educational institutions as the main economic obstacle. Schools have been closed in most places for the duration of the war and are now set to remain closed into the second week of April for Passover break, leaving parents trying to juggle work and childcare.

Least affected by the war have been non-retail industries that can easily shift to remote work, such as tech and financial firms, the survey showed.

In many places, including Tel Aviv, which has been battered by missile attacks daily, there are still efforts to maintain a semblance of normalcy, with residents trying to get out and about. But even those businesses that open for business often close early.

“In the beginning, it was just me — no hairdressers, clothing shops, or juice makers — as cafes like ours have a regular local clientele, so there is some work. But still turnover dropped by 50%, so we order half the pastries and we open and close earlier,” said Zahi Zilberlicht, who runs a popular neighborhood café, while preparing a cappuccino.

“When I talk to suppliers, other shops in the area, there are many who are not working and have no business at all, and for others turnover has slumped by at least 50% to 70% — not to mention restaurants, which have been hit even harder.”

Davidov recounted that in calmer times, Bezalel’s vibrant and bustling clothes and home appliances market would attract shoppers looking for a bargain or just having fun browsing, but no one is in the mood right now. Many stalls would spread out wooden tables with huge piles of clothes that shoppers could sift through in hopes of finding a hidden treasure like designer jeans or running shoes. Other stalls feature rack after rack of cheap closeouts.

The Israel Defense Force’s Home Front Command initially ordered all nonessential businesses to shutter after Israel and the US jointly launched an offensive against Iran on February 28, prompting retaliatory missile fire from the Islamic Republic.

It eased restrictions after a week to allow the economy to get back on its feet but kept schools in most places closed, with missile fire continuing nearly unabated. Davidov, a father of three kids under the age of 12 from the Tel Aviv suburb of Holon, said he reopened his Tel Aviv stall after a week.

“We had a tough night — Holon recently feels like being in Kiryat Shmona, as almost every day there is a hit,” said Davidov, referring to the city on Israel’s border with Lebanon that has been pounded by Hezbollah rocket fire. “There are days when we are not open at all and on others, I open at 10 a.m. and leave by 2 p.m., depending on how much patience I have and what is happening at home.”

“If I don’t make enough for even gas for the motorcycle to get me here, why should I come?” he asked.

According to the Finance Ministry, the economy lost about NIS 9.4 billion ($3 billion) in the first week of the war. Since then, the economic damage is estimated at about NIS 4.5 billion ($1.4 billion) per week, according to treasury estimates.

The ministry recently lowered the country’s growth forecast for this year from 5.2% to 4.7%, which the Bank of Israel said was an optimistic assessment.

With businesses slowing for weeks, livelihoods are on the line.

“Our turnover has cratered by more than 90 percent, and almost all of our income has gone,” said Davidov. “I doubt we can hold on for more than a month, but beyond that we will have to lower the shutter, and we just won’t be here.”

Businesses have been hit hard for the last six years, starting with the lockdowns during the coronavirus pandemic, followed by the October 7, 2023, Hamas onslaught, which triggering a two-year multifront war, and then the 12-day fighting with Iran in June.

“All of our savings were eaten up… every year another financial hit,” said Davidov. “There is some state compensation, but we can’t count on it to get through the month, as during the last war it took one and a half years to receive, so there is no other choice than taking out loans.”

About 32% of businesses said they estimated a wartime loss of more than 50% of their revenues, and about 24% said they expected no impact on revenues or a moderate impact of up to 10%, according to the CBS survey.

Among food and beverage businesses, about 44% said they estimated a revenue loss of more than 50%.

Only about 6% of businesses in the tech industry estimated that their revenue in March would be severely affected.

CBS researchers said the expected impact on a company’s revenue was more severe the smaller the business, similar to previous wars. This stems from many economic factors (liquidity, online and remote communication systems, and access to international trade) that provide greater resilience for larger businesses compared to small businesses, they said.

The slowdown for Tel Aviv retailers is visible not only at the Bezalel market, where many stalls were closed on a recent visit, but also on the adjacent, usually buzzy commercial King George Street, which is also quieter than during peacetime.

“No one wants to go out and be caught at a restaurant when the siren goes off — people prefer to be home with their families,” said Zilberlicht, who runs the Ellu Metsiot coffee place there.

Zilberlicht, 43, said half of the customers coming in to grab a coffee, usually while walking their dog, are visibly tired from being woken up by multiple air raid sirens every night.

Zilberlicht, his wife, and their 18-month-old daughter live on the fourth floor of an old building without an elevator and without a safe room in central Tel Aviv. On the first day of the war, the adjacent neighborhood was hit by a missile in a deadly strike.

“Our building was very close to the hit, which we heard and felt,” said Zilberlicht, who, together with his family, was in a public bomb shelter in a nearby school at the time. “Our windows were shattered, glass broke, and the whole neighborhood was heavily damaged.”

Zilberlicht and his family, together with the rest of the building, were evacuated and spent a couple of days sleeping in a public bomb shelter before being transferred to a hotel.

“I continue to get up every day at 5 in the morning; it is hard for me to sit at home – I have always worked,” said Zilberlicht. “The mental fatigue around us is hard to ignore, but I am optimistic that we will get through this until the next blow comes.”

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