Ukrainian Restaurateurs raise prices by 10-15%

Author : Andrey Korneyev

Source : 112 Ukraine

Trip to a restaurant in Kyiv is increasingly turning into a holiday. Since the beginning of this year, food and beverages rose by an average of 30-40%, due to an increase in selling prices of suppliers. Exchange rate fluctuations over the past few weeks have forced institutions to reconsider their pricing policies. Most restaurateurs hoped that they will be able to earn good money before Christmas, when the Ukrainians are ready to part with their money
08:30, 17 December 2015

112 International

Prices on the menu at Kyiv restaurants changed again. According to the CEO Restaurant Consulting, Olga Nasonova, meals and drinks on the menu over the last few weeks, rose by an average of 10-15%. "Restaurateurs have decided to increase them before Christmas, when the demand for the services of such places is at the maximum," - says the expert. Themselves institutions refuse to talk about the rise in price of food and drinks.

Kyiv institutions are reviewing their pricing policy for the third time over the last year. "From the beginning, they (prices - Ed.) have grown by at least 30%," - recognizes the commercial director of Mirovaya Karta network (Lipsky Osobnyak, Marrakesh, Mimino, Buddha-barKyiv and so on.), Vitaly Shadchnev. For example, if at the beginning of the year it was possible to spend the evening over a beer and a snack and leave 100-150 UAH, now for the same purposes it is necessary to spend at least 180-200 UAH. The cost of a business lunch in restaurants of an average price range would cost about 100 USD, and the price of alcoholic drinks start at 80-90 UAH.

In institutions blame the vendors who periodically review the selling prices. "This year, alcohol raised in price from almost all suppliers. This is due to the devaluation of the hryvnia, as well as higher excise taxes," - recognizes the CEO of the alcohol importer Vitis, Sergei Mazur. According to the State Statistics Service, in November, selling prices of Ukrainian producers rose by 25.1% compared to the same month last year. For example, according to the ministry, during this period beverages raised by 29.7%, 23.3% - meat and meat products, 44.3% - bread and bakery products, 68.6% - sugar.

Due to inflation and devaluation from 22.8 to 25 UAH per 1 US dollar over the past month, the producers talk once again about the growth in selling prices. "Every week I have to deal with suppliers who want to increase the price of their products" - recognizes the CEO of a major restaurant in Kyiv on condition of anonymity.

Difficult period

Until 2014, the attendance of Kyiv food outlets grew annually by 20-30%. The first serious problem occurred in the winter of last year - the bulk of potential visitors was mainly in the central square of the city and began to come in much less in restaurants and bars. During the most violent clashes, cafes, bars and restaurants, which worked in the central part of the city were forced to close. For example, a restaurant SoloPizza, who previously worked in the transition under the Independence Square, after the events of winter 2014 was not opened.

But the main problems of restaurateurs have begun this year. Due to the sharp exchange rate fluctuations, when the value of the dollar in February reached 28 UAH consumer’s sentiment of Ukrainians deteriorated sharply. According to research firm GFKUkraine, in February consumer sentiment index was 41.1 (at the maximum - 200), which is 4.8 p. less than in January 2015. As a result, in the first half of the year restaurateurs recorded a maximum outflow of visitors over the past five years - by 30-50% compared with the same period last year. Apart from the desire of Ukrainians to save rather than spend, the rise in prices on food and drinks on the menu made them to drop by the bars less. Then many places dared to raise prices by an average of 20-25%, and in some restaurants - 30-40%.

The battle for the visitors started. "Those who have sharply increased the cost of food and beverages have lost customers," - says Olga Nasonova. Other restaurateurs did their best to give up the use of imported products but used products of Ukrainian origin. "For example, we buy Ukrainian meat. Some farms produce a product of excellent quality," - recognizes the well-known Ukrainian restaurateur Dmitry Borisov. That approach gave a result while maintaining prices, the number of visitors in institutions has not decreased.

Restaurants closing

The unstable situation has led to the shut-down of some restaurants from the market. According to Olga Nasonova until the end of the year in Kiev, about 100 food outlets will be closed, and their total number will decrease to 1.4 thousand. Mostly it comes to non-chain outlets. According to market statistics, every third restaurant opened in Kiev is new, half of which is closed during the year. Many businessmen believe that the restaurant business - simple and easy, so they prefer to invest in it. Facing with difficulties, they quickly abandon their offspring.

But in contrast to previous years, in 2015, two major Russian networks - Yakitoria and Rosinter Restaurants has left the Ukrainian market. Five of their restaurants in Kiev Yakitoria were closed in May this year, after unsuccessful attempts to sell the business. "The owners asked for a very high price, which turned out to be unaffordable," - says the director of the Kyiv restaurant chain, who requested anonymity. A leave of Ukraine was not associated with the tense political situation between the two countries, but with the high prices in the outlets. Against this backdrop, the central office refused to support its Ukrainian unit.

In late October, followed the example of his Russian counterpart the company Rosinter Restaurants, which closed its latest restaurant TGI Friday's in Ukraine. In the previous year, the company operated in our country with such institutions as IL Patio, Costa Coffee, but over the past three years, it has been abandoning from them. "The Russian office did not support the development of business in Ukraine. To survive TGI Friday's had to change, because many burger outlets began to open. Competing with them was not easy", - said the director of the capital's restaurants, who requested anonymity.

Hopes for the new year

To raise the price before the New Year festivities restaurateurs decided, feeling stabilizing the situation in the country. Over the past two or three months of last year’s attendance in restaurants has increased and is comparable to the same period last year. This is due to stabilization of the country's leadership and the statement that the Ukrainian economy has reached the "bottom" and in the next few years will start to recover. According to the company GfK Ukraine, in October evaluation of the current economic situation of Ukrainians increased by 5.9 points compared to September - up 42.6.

Restaurateurs hope that during the holidays tired of negative news Ukrainians, will stop to save on everything. And it seems that their hopes are justified. In the capital, already booked most of the outlets located in the central part of the city on December 25-26 and 18-19 - these dates are considered to be "golden" in 2015.

However, rising prices for food and drinks can affect the attendance in the next year. This would be the case if in 2016 the sharp exchange rate fluctuations will be observed and the general deterioration of the economic situation.

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