According to experts, saving money in conditions of global instability and high inflation has become meaningless. Moreover, both in rubles and in dollars or euros, since the inflation rate in the eurozone and the United States is also breaking records. Therefore, the earned funds should be immediately spent or invested, not in banks, but in a real business, for example, restaurants and bars: despite the crisis, the HoReCa sphere is developing and receiving guests.
What is happening in this market segment now?
Restaurateurs hoped that in 2022 there would be an opportunity to take a breath and recover, but the market is entering the next zone of turbulence, which will affect all spheres of life.
Of course, sanctions will affect logistics chains, purchase prices, the labor market, and a decrease in the purchasing power of the population. At the same time, there is always the fact that people will not stop buying (especially in a situation where there is no point in saving), therefore, despite the crisis, the catering industry will remain in trend.
So, according to Rosstat, the turnover of restaurants, cafes and bars in March 2022 amounted to 165.8 billion rubles, or 99.9% (in comparable prices) to the level of the corresponding period of the previous year, in the first quarter of 2022 it was 483.8 billion rubles, or 105.9%.
In general, the following trends are observed in this market:
- Purchasing power will decline, but the market will not feel it right away: for about six months everyone will live without feeling the consequences of current events, and guests will start saving primarily on restaurants that are already raising prices by 7-20%
- Towards the end of 2022, many restaurant projects will decide to close, especially in the fine diving (haute cuisine) segment, and those entrepreneurs who planned to open such establishments in the spring or summer will abandon their plans.
- As people seek to reduce spending, a boom in domestic street food and fast food is expected, which is due, among other things, to the departure from our market of foreign companies such as McDonald’s, and the fact that the Moscow government has already allocated 1 billion rubles to create a replacement for it. The fast food industry is promising not only because it is actively growing during a period of economic stability, but also because it remained stable during crises, and the food products used in this area are 99% supplied by Russian manufacturers.
- During the crisis, the emergence of a negative agenda, many people have a desire to relieve stress, and one way is to visit entertainment establishments. This will lead to the fact that the audience of cafes, dance bars, bars with a show program will grow significantly, which means that the revenue of these establishments will increase, since they are at the intersection of two segments of the market – catering and leisure.
- Recently, karaoke bars have become especially popular: perhaps this way people also relieve stress. Taking into account these preferences, new formats appear, for example, karaoke glasses.
- The average check will increase slightly, which is more due to the new pricing policy of the restaurant and bar business, as the cost of food and drink continues to grow.
- • Guests will stop going to restaurants for no reason, and private events are likely to be held in small banquet halls or bars.
- Now is the best time for franchising – investing in a new business, since the advantages of this format for franchisees are obvious: these are proven business processes, effective marketing, recognizable and strong brand, franchisor in the person of a management company – a reliable partner who will help to cope with problems, in this case there are more chances of making a profit in the shortest possible time, and most importantly, a franchise is a time-tested business model with clear payback periods.
- That is why most of the new projects will open under a franchise: according to the Businessmens.ru service, although the demand for them fell significantly at the end of February, in the first half of March it began to recover rapidly and has now stabilized, which is confirmed by the statistics of requests in Yandex. By December, in some niches, it can grow to 20%. An additional incentive is the promised support of new business by the state in the form of tax benefits, grants, etc.
- On the other hand, this period should be used to develop an existing business, that is, to scale through franchising. This will primarily interest entrepreneurs who want to reach the federal level and scale their network in 2-3 years to 300 or more points.
Why is it profitable?
- Restaurant and bar business looks attractive:
- The area that covers basic needs
- has a reasonable level of initial investment;
- There is now low competition in certain subspecies of the hospitality industry, such as bars: this is due to the fact that, unlike restaurants that survived the pandemic by organizing delivery, the number of drinking establishments decreased significantly, which led to the cleaning of the market from weak players, but at the same time caused a shortage and, as a result, made the business model of bars the most popular among the public, which missed the festive atmosphere;
- profitability here can be up to 35%;
- average payback period of approximately 11-14 months;
- the ability to scale
According to analysts, despite the crisis, this area is promising, and active players in the restaurant and bar market will demonstrate qualitative growth if they are able to minimize losses in sales and quickly adapt to the changing situation.
By Alexander Pichugin, CEO and Managing Partner of the Feudal Network of Bars