The Dutch are eating out again, including this Christmas. However, according to research by ABN Amro, many restaurants have barely survived the corona epidemic. High food and personnel costs reduce profits. More than half of catering entrepreneurs are struggling with tax debts.
It’s a recognizable image for Eric Toren, owner of Bougainville, a restaurant he opened in a hotel in the heart of Amsterdam in 2017. Just a year later the company received a Michelin star. “We’re finally getting to the point where people recognize us as a bar, hotel and restaurant,” says Toren. “Then we had to close due to Corona.”
Corona debt, together with high costs, still puts great pressure on profits. “Think of the energy, the staff, the cost of 15 percent more for meat and 20 percent more for fish. We try to convey that, but we also look at our ‘competitors’. “If the price of something is 100 euros, we cannot pay 200 euros.” .ask the same thing.”
Toren believes many restaurants face the same problems even though tables are full. “You’re already seeing restaurants open fewer days.” Review site Tripadvisor recently named Toren’s restaurant the best restaurant in the world, but Toren doesn’t want to celebrate until his debt is paid.
Money flows into “experience”
ABN Amro’s analysis confirms that reservations are not to blame. This shows that despite the high cost of living, the Dutch do not make major compromises on food. “Restaurants have become significantly more expensive, but consumers are more likely to save money and continue to spend on experiences,” says ABN economist Gerarda Westerhuis.
The bank expects people to spend 2 percent more on eating out next year than this year. This growth is lower than in the previous two years, but according to Westerhuis, this is a “normalisation”. There appeared to be a offset effect in 2022 and this year as well.
Just because consumers spend good money in the restaurant industry doesn’t mean they make more profit. Food purchasing costs will not fall much next year and personnel costs will increase significantly.
Staff recruitment has become a little easier, but 58 percent of catering entrepreneurs say they still experience a lot of difficulties in this regard.
You don’t have enough money of your own
During the corona epidemic, a relatively large number of catering entrepreneurs applied for tax deferral. These accumulated Corona debts must now be paid.
The Central Statistics Office recently reported that 55 percent of catering entrepreneurs are still struggling with tax debt. For the Dutch business community as a whole, this figure is much lower: 31 percent. Moreover, two-thirds of catering entrepreneurs state that they do not have sufficient funds to meet their obligations in the short term.
historically low
The long-awaited wave of bankruptcies in the catering industry has still not occurred. ABN Amro expects 1,490 restaurants to close their doors, either compulsorily or voluntarily, this year. Self-employed people in the catering industry are exempt from this. This figure is slightly lower than in 2022 (1,695), when the number of bankruptcies was historically low, but significantly higher than in 2021 (1,045), when the number of bankruptcies was historically low.
A November CBS poll found that 11 percent of restaurant business owners do not expect to continue their business for another year.
Source: NOS
Roy Brown is a renowned economist and author at The Nation View. He has a deep understanding of the global economy and its intricacies. He writes about a wide range of economic topics, including monetary policy, fiscal policy, international trade, and labor markets.
