Estonians still not cutting consumption as prices continue to rise

Bars and restaurants in Tallinn.
Bars and restaurants in Tallinn. Source: Ken Mürk/ERR

Despite restaurants and cafes raising prices, there is still no shortage of customers and consumption has not fallen noticeably. But analysts say this cannot last forever.

Thursday's "Aktuaalne kaamera" spoke with business owners in Tallinn to get an overview of their situations.

The Vana Villem pub chain, which has several branches across Estonia, said it has raised prices more this year than in the previous five years combined.

"We've also had to increase the price of drinks, but not as much as food. We have increased drink prices by, maybe, between 5 and 10 percent, food prices have already risen by 15-20 percent," said board member Aare Hallop.

Small businesses, hit by rising energy bills, have also started charging more.

Dereku burger owner Fleur Sprenk said the company has started offering more services, such as a takeaway lunch menu.

"And a lot of catering on top of that. And in the summer, which was a very positive surprise — festivals, farm days, the Saaremaa Maritime Days. I try to do it once or twice a month. It's a lot more [work]," she said.

The average bill at the Korean restaurant Gotsu has increased by approximately €2. The majority of orders are placed via food courier apps.

"The two main ingredients are chicken and oil. The price increases for these two are noticeable. Before corona, three-quarters [of customers] came here. Now it's the other way round. Eating local is getting better, but there are noticeably more takeaway orders," said restaurant manager Evelin Aps.

Businesses said they have not yet seen their turnover fall due to higher prices.

The Bank of Estonia said consumption is still high and people have been spending their savings.

"In general, we have seen throughout this year, and especially in the summer months, that more has been spent than pay rises would have allowed," said economist Rasmus Kattai.

He said savings were accrued during the coronavirus pandemic and, additionally, many people took money out from their second pillar pension funds.

But this cannot last forever, he said, and consumption habits may start to change in January.


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Editor: Barbara Oja, Helen Wright

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