After the corona pandemic, the catering industry is struggling with new challenges. The number of bankruptcies threatens to rise further.
According to industry observers, a return to full VAT on food in restaurants at the turn of the year could lead to more bankruptcies in the catering industry.
“Even after the corona pandemic, the catering industry faces a large number of challenges, including inflation, rising energy and personnel costs and a trend towards working from home,” explained Frank Schlein, Managing Director of the information service provider Crif. “The increase in VAT could further aggravate the situation, especially for catering companies that are already financially weak.”
Number of bankruptcies increased
According to Crif, 14,219 restaurants, pubs, snack bars and cafés in Germany are at risk of insolvency, according to August figures. That is 11.9 percent of the nearly 120,000 companies analyzed. In January 2020, before the outbreak of the corona pandemic in Germany, the number of restaurants at risk of insolvency was 12,662.
Crif pointed out that in the first half of 2023, the number of bankruptcies in the catering industry had risen above average: With 743 bankruptcies, there were 29.4 percent more bankruptcies in the industry in Germany than a year earlier. The German Hotel and Restaurant Association (Dehoga) assumes that around 12,000 businesses will give up if there is a return to full VAT.
The VAT on food in the catering trade was reduced from 19 percent to 7 percent during the corona pandemic. In view of a feared energy crisis, the regulation was extended until the end of 2023. How things will continue in 2024 will have to be decided in November by the Bundestag as the budget legislator, Federal Finance Minister Christian Lindner (FDP) recently said.
Source: Stern
