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Gastronomy in crisis: Expensive times and falling guest numbers!
Restaurateurs are struggling with losses and price increases. Alexander Scharf explains how inflation and the crisis are affecting the industry.
Gastronomy in crisis: Expensive times and falling guest numbers!
There is currently a difficult climate for the catering industry in northern Germany. Restaurateur Alexander Scharf is the best example of this. He runs four restaurants and has been faced with a total loss of a whopping 800,000 euros for two years. The reasons for this are clear: price increases due to inflation in 2022 have made going to restaurants a luxury that many can no longer afford. According to a survey by the German Hotel and Restaurant Association (Dehoga), low-income earners have been eating out noticeably less frequently since January. Scharf sees this as a worrying development for the industry.
To counteract this trend, Scharf has launched special offers. He offers a burger and a lemonade for 16.90 euros, and children can eat for free. “We want families to be able to afford to go to a restaurant too,” he explains. Despite the challenges, Scharf has an optimism that inspires many in the industry. To support his businesses, he even took out a liquidity loan.
Rising prices and consumer restraint
The situation for restaurateurs is not new. Since the beginning of 2022, the prices for pizza, pasta and many other dishes in restaurants have risen significantly. DEHOGA reports a price increase of over 26 percent between January 2022 and July 2025. The result: many guests are reluctant. Not only do you forego expensive dishes, but also starters.
The sales of hoteliers and restaurateurs in the first half of 2025 are 15.1 percent below the 2019 level in real terms. Compared to the previous year, the real sales decline is 3.7 percent. One reason for this is the increased labor costs, which have risen by more than 34 percent since 2022. Food prices, non-alcoholic drinks and energy costs have also increased by around 30 percent. In most restaurants, labor costs account for more than 40 percent of sales, while cost of goods sold is over 30 percent.
The challenges of the industry
In addition, many catering entrepreneurs are struggling with increasing pressure from energy costs, insurance, fees and leases, which can amount to between 10 and 15 percent of sales. 72 percent of restaurateurs state that they were unable to make necessary investments. High fluctuation in urban areas and the difficult search for successors for restaurants in rural areas are further challenges that are pressing for the industry.
Scharf has acquired another restaurant to make up for his losses. He explains that calculations in the catering industry no longer focus solely on the cost of goods, but rather focus more on the contribution margin per guest. In many restaurants this is between eight and 16 euros. According to Scharf, a planned reduction in VAT from 19 percent to 7 percent from 2026 could save him around 450,000 euros annually and thus help to cushion the losses somewhat.
The signs point to a storm in the catering industry. Given these challenges, it remains to be seen to what extent the industry can adapt and recover. Scharf calls for more focus on marketing and event catering to bring a breath of fresh air into the industry. It remains to be hoped that the targeted VAT reduction for food in the catering industry will actually be implemented from January 1st, as promised in the coalition agreement.