In Germany, around 48,000 restaurants have closed since 2020. And experts estimate that things will get worse in the near future
Difficult times for chefs: according to a survey by the Creditreform organization, published a few days ago, in Germany since 2020 around 48,000 businesses have closed and 6,100 more have filed for bankruptcy. And experts estimate that things will get even worse.
1/10 of restaurant businesses closed last year alone – 14,000 more stores closed in 2023 than in the previous three years. A corresponding increase is observed in bankruptcy applications. According to Patrick-Ludwig Hants, director of economic research at Creditreform, this is also due to the benefits given during the lockdowns – because many troubled businesses were thus able to prolong their survival, without being forced to close immediately.
A suffering industry
The difficulties facing the sector are due to a variety of reasons, Hunts adds: “Gastronomy is one of the big losers of the crises of recent years.” And before the stores managed to recover from the pandemic, inflation came, as the expert explains. The increased costs have significantly affected the industry and the resulting price increase is consequently driving many customers away. That is why the – adjusted for costs and inflation – turnover as well as profits are less than before the pandemic. “Economic conditions are far from favorable for the industry. And the increase in VAT on the focus made at the beginning of the year does not improve the situation at all.”
In mid-2020, during the pandemic, the German government reduced VAT on restaurants from 19% to 7% – partly due to the energy crisis and high inflation. From January, however, the previous VAT applies again.
According to the Federal Statistical Service, the turnover of catering businesses in 2023 was 13% lower than in 2019.
Mainly small, new businesses go bankrupt
Ingrid Hartges, managing director of the German Hotel and Restaurant Association (Dehoga), says she is “bitter” by these developments: “During the three years of the pandemic we were in lockdown for nine months and throughout the period until the spring of 2022 we faced many difficulties. And all this has led to significant revenue losses.”
The industry is suffering from high staffing costs, rising food prices, labor shortages and rising VAT. “Businesses have many problems. Most of our customers remain loyal, but they have decreased compared to the past.”
According to Creditreform in 2023 bankruptcies in the catering sector increased by 27% more compared to the overall economy. Catering and catering services companies were the most affected (+67%). 88% of all bankruptcies involved the smallest businesses employing up to 10 workers. 49% were new businesses – meaning they had been in operation for up to five years.
Creditreform estimates that in 2024 bankruptcies will reach pre-pandemic levels. Corresponding is the forecast of the financial information service Crif. Experts believe that the restaurants, snack bars and cafes that will be threatened with bankruptcy in Germany will exceed 15,000.
Edited by: Giorgos Passas
Source: Skai
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