Crisis forces restaurants and cafes to close in Germany

(Patria) - Difficult times continue for German restaurateurs. Since the first pandemic year of 2020, around 48,000 businesses have closed, and 6,100 have gone bankrupt, according to a study by the agency Creditreform. Experts, however, expect a further negative trend.

- The wave has only just begun - says Patrick-Ludwig Hantzsch, the agency's research lead.

Last year alone, one in ten entrepreneurs in the gastronomy sector gave up their business. 14,000 establishments closed, which is more than in the previous three years.

Bankruptcies are similar, with a 27 percent increase in 2023, according to Creditreform data, higher than in the economy as a whole.

Mostly small businesses, with up to 10 employees, were insolvent - 88 percent of all.

Hantzsch points out that one of the reasons is state aid during the lockdown. Subsidies ensured the survival of many companies and initially prevented business closures.

- The gastronomy sector is one of the main losers in a series of crises in recent years - says Hantzsch, explaining that the industry has not yet recovered from the pandemic crisis, and then the blow of inflation arrived.

In addition, the German government temporarily reduced VAT for restaurateurs in mid-2020, from 19 to seven percent. However, regular rates have been in effect again since January.