Increase of 30 percent expected in 2024 – Extremnews – The slightly different news

By 2023, the number of bankruptcies in the industry had already risen by 35 percent to 906 cases (2022: 670 bankruptcies).

The persistently high inflation, the increase in VAT on food and the trend towards working from home are hitting many businesses hard. The lunch business in particular is suffering from the change in working habits, which means that many restaurants are recording significant revenue losses.

There is currently a clear division in the industry: While some popular restaurants are able to pass on the increased costs to their guests and thus restore their financial stability after the corona crisis, other businesses are fighting for survival. “In particular, restaurants that were already financially struggling before the pandemic are hesitant to implement price increases for fear of losing even more guests. For these restaurateurs, the current mix of higher costs and a slump in consumption has a reinforcing effect. Since the insolvency statistics primarily “reflect the past – they are a look in the rear-view mirror – the negative effects on the industry are now also noticeable in the statistics,” explains CRIF Germany Managing Director Dr. Frank Schlein.

Although the credit rating index – a measure of the financial stability of the catering industry – has improved slightly on average compared to the period before the corona pandemic (January 2020: 3.02; June 2024: 2.80), the proportion of businesses at risk of insolvency has increased from 10.7 percent to 11.7 percent in the same period. In June 2024, a total of 13,852 catering businesses were classified by CRIF as at risk of insolvency.

This is despite the fact that thousands of financially troubled catering companies have already left the market due to bankruptcies.

What is particularly problematic is that many catering establishments quietly close their business before filing for official bankruptcy. Typically, for every officially reported bankruptcy in the catering industry, there are about ten silent business closures. This trend remains stable and illustrates the extent of the current crisis in the industry. Between 2020 and 2022, the number of catering establishments fell by around 20,000, while 2,280 bankruptcies were registered during this period. This shows that many entrepreneurs choose to close their businesses due to the small size of their businesses and the manageable creditor structure.

Regionally, restaurants in Berlin have the highest risk of insolvency (14.6 percent). Close behind are North Rhine-Westphalia with 14.5 percent and Saxony with 14.1 percent.

Source: CRIF GmbH (ots)