Restaurateurs have seriously reduced their activity in opening new establishments

Despite the gradual recovery of traffic in catering establishments across the country, restaurateurs have seriously reduced their activity in opening new outlets. In the first quarter of 2024, 40% fewer new foodservice companies were registered. This is due to a shortage of personnel and premises, as well as increased loan rates and operating costs. Market participants do not expect a boom in new discoveries this year, nor do they expect changes in the current environment.

In January-March 2024, the number of registrations of new companies in the catering industry throughout Russia decreased by 40% year-on-year, to 5.9 thousand, as calculated by Kontur.Focus. This is also 30% less than the value of 2022, when 8.5 thousand new organizations in the industry were registered, analysts said.

The previously introduced exemption for restaurateurs from VAT for revenues exceeding 2 billion rubles. and the tax service’s fight against business fragmentation have led to an increase in the opening of new restaurants within existing legal entities, notes Irina Blagoveshchenskaya, vice-president of the Federation of Restaurateurs and Hoteliers of Russia. According to her, in past years it was widely practiced to create a separate legal entity for each opening of an establishment. But the majority of restaurants operating in the country are not large chains, but small and medium-sized businesses, argue CORE.XP.

The decline in registrations at the beginning of 2024 may be caused by a reduction in the activity of potential investors in the catering segment at the end of 2023, says Franshiza.ru expert Anna Rozhdestvenskaya. According to her calculations, in October-December 2023, the demand for starting a franchise business in this area decreased by 8% year-on-year. According to the founder of the Rakovaya gastrobar chain, Evgeniy Nichipuruk, the restaurant business is high-risk and “is a kind of marker of anxiety and uncertainty among entrepreneurs.”

There are quite a few factors that reduce investor interest in opening restaurants, including a shortage of personnel, notes RestCon CEO Elena Perepelitsa. “Two years ago, everyone was talking about the labor market being skewed in favor of the employer; now the situation is completely different: salary expectations of line personnel and middle management are growing, and the choice is decreasing,” adds Tatyana Kornienko, marketing director of the Stardogs network. The situation is unlikely to improve in the near future: the shortage of personnel will worsen due to another wave of outflow of personnel from Central Asia, Ms. Perepelitsa predicts.

In addition, the quality supply of premises for restaurants is being washed out, says Irina Kozina, director of street retail at NF Group. In conditions of a shortage of space, owners notify restaurateurs about an increase in rental costs for existing contracts that are close to completion, and if the contract is long-term, they still try to increase the rate, notes Alexander Muratov, director of development of the Yakitoria franchise network. This factor, combined with the growing costs of repairing new outlets, scares many industry players, says Market Liner CEO Maxim Gurzhiy.

The inflation trend has had a direct impact on margins, which makes it increasingly difficult for new players to enter the market, the expert continues. Increased food and equipment procurement costs led to an overall 9% to 15% increase in operating expenses in 2023, he said. The rising cost of courier and logistics services increases operating costs, especially for restaurants that are heavily dependent on food delivery, notes Evgeniy Prokhorov, director of business development at Shokoladnitsa Group of Companies. With the current key rate of the Central Bank, borrowed funds for opening new companies in the catering industry have also become more expensive, adds Irina Blagoveshchenskaya.

The decrease in the activity of restaurateurs was also influenced by the slowdown in revenue growth. According to the calculations of the Check Index (part of the OFD Platform), in January-March 2024, the turnover of catering establishments throughout Russia increased by 13% year-on-year. From January to the first half of March 2024, Moscow restaurateurs earned 16% more revenue year-on-year due to an 11% increase in the average bill, Focus Technologies calculated. They clarified that the number of orders increased by only 4%.

Daria Andrianova