Hungarian Restaurants Are Suffering – Go Bankrupt or Lose Customers?
It seems that the Hungarian catering industry is again facing difficulties. Shortly after the great test that restaurants and other catering units had to face due to the restrictions caused by the new coronavirus pandemic, they now have to face a new problem: to raise prices and lose a lot of customers or suffer increased expenses and risk going bankrupt.
The second shot
Vilaggazdasag asked László Kovács, President of the Hungarian Restaurant Industry Association (MVI), about the current issues facing the profession.
The expert said many restaurants have not placed as much of the growing costs of running their businesses as they could have on customers, trying to keep prices low and maintain happy customers.
The president said this summer could bring a big divide; many external circumstances have raised prices or will soon cause supply chain and cost disruptions.
Moreover, international tourism had not yet fully recovered in Hungary, so there is a great need for campaigns that would keep Hungarian tourists interested in domestic destinations and spend their money on Hungarian catering units, Forbes reported.
Since the coronavirus has caused great losses in the industry, recovering from it was difficult in itself, so many restaurants have not been able to create savings or emergency reserves that could help them overcome another crisis situation.
World events impacting the restaurant industry
infostart points out that the catering sector is also facing a labor shortage; after the onset of the coronavirus restrictions, many people quit their jobs in the industry altogether, and many of them do not want to return, or if they do, they are now demanding higher wages.
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In addition, rising world prices and inflation, which Hungary is particularly affected, increase overall operating costs.
Not to mention that the war in Ukraine could also have a major effect on the industry; wheat imports may decline, steel production is constrained, and energy and gas supplies are uncertain at best these days.
All of these events would lead to a 40-50% price increase in the restaurant business, but at that time they could lose a lot of their customers.
However, they might need to implement an overall price increase of 20-30% or they could go bankrupt due to high fuel, grain, gas and labor costs.
Source: Forbes.hu, infostart.hu, világgazdaság.hu