Restaurants in German cities see revenues rise after crisis years
The gastronomy sector in major German cities is finally enjoying better times despite multiple crises in recent years, according to a new study by the Ifo Institute.
The study indicates that restaurant revenues have rebounded in Berlin, Hamburg, Munich, Stuttgart, and Dresden, with inflation-adjusted figures even surpassing pre-pandemic levels.
"There's an upswing in the gastronomy sector after the Covid-19 pandemic, despite the war in Ukraine and inflation," said Simon Krause, one of the study's authors.
However, he cautioned that the cities surveyed have particularly affluent populations. Rural areas may not be experiencing the same recovery, and data on tourist consumption, which remains below pre-pandemic levels, is not available.
Analysing the last six months, including the fourth quarter of 2022 and the first quarter of 2023, the study shows a consistent increase of at least 20 percent compared to 2019 across all cities. Munich and Hamburg recorded even higher numbers, while Berlin showed significant growth.
Carla Krolage, another author of the study, explained: "Establishments were able to pass on some of the increased costs of personnel, food, and energy to consumers without losing their customer base."
Restaurant prices have risen more than the overall inflation rate, according to data from the Federal Statistical Office.
READ ALSO: EU forecasts German economy in recession in 2023
The Ifo researchers also observed a shift in the gastronomy landscape. Business in the usually lower-revenue outskirts grew proportionally more than in city centres.
Saturdays and Sundays saw above-average increases, possibly influenced by the increased prevalence of remote working, with more people eating out in their residential areas.
The German Hotel and Restaurant Association (Dehoga) recently expressed a less optimistic view of its members' situation.
They reported that summer business had been worse than expected, although this period falls outside the scope of the Ifo study.
Dehoga also raised concerns about rising costs and called for the continued reduction of value-added tax for their industry.
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The study indicates that restaurant revenues have rebounded in Berlin, Hamburg, Munich, Stuttgart, and Dresden, with inflation-adjusted figures even surpassing pre-pandemic levels.
"There's an upswing in the gastronomy sector after the Covid-19 pandemic, despite the war in Ukraine and inflation," said Simon Krause, one of the study's authors.
However, he cautioned that the cities surveyed have particularly affluent populations. Rural areas may not be experiencing the same recovery, and data on tourist consumption, which remains below pre-pandemic levels, is not available.
Analysing the last six months, including the fourth quarter of 2022 and the first quarter of 2023, the study shows a consistent increase of at least 20 percent compared to 2019 across all cities. Munich and Hamburg recorded even higher numbers, while Berlin showed significant growth.
Carla Krolage, another author of the study, explained: "Establishments were able to pass on some of the increased costs of personnel, food, and energy to consumers without losing their customer base."
Restaurant prices have risen more than the overall inflation rate, according to data from the Federal Statistical Office.
READ ALSO: EU forecasts German economy in recession in 2023
The Ifo researchers also observed a shift in the gastronomy landscape. Business in the usually lower-revenue outskirts grew proportionally more than in city centres.
Saturdays and Sundays saw above-average increases, possibly influenced by the increased prevalence of remote working, with more people eating out in their residential areas.
The German Hotel and Restaurant Association (Dehoga) recently expressed a less optimistic view of its members' situation.
They reported that summer business had been worse than expected, although this period falls outside the scope of the Ifo study.
Dehoga also raised concerns about rising costs and called for the continued reduction of value-added tax for their industry.
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