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People not spending as much in restaurants in Estonia

Must Puudel.
Must Puudel. Source: Ken Mürk/ERR

Despite Estonia's ailing economy, restaurants are looking to close the year with stronger than anticipated results. Analyst for SEB Mihkel Nestor suggested that people having replaced buying stuff with pleasant experiences in the aftermath of the coronavirus period is one reason.

Restauranteurs say that only the most tenacious – those with the energy to grapple with the coronavirus, energy and economic crises and looming tax hikes – will survive.

While most restaurants are full of customers during the winter holiday season, owner of the Must Puudel cafe in Tallinn Margit Udikas-Susi said that people are buying less.

She said that while people do not yet hold back when out partying in the evening, fewer people come in for morning coffee. "The cake course is also omitted more often," she added.

Anatoli Rjabov, executive manager of R14 Restaurant in Tallinn's Rotermann Quarter, said that December has been an easier month courtesy of private and corporate events and tourists, while it was clear in October and November that purchasing power has fallen.

He added that people increasingly go for portions meant for sharing instead of the traditional three courses also at R14.

While companies' turnovers remain unchanged, expenses have grown so much that recent sales are no longer satisfactory.

Mihkel Nestor, analyst for SEB bank, said that people still go out to eat because they are tired of the isolation of the coronavirus period.

"The tertiary sector has not bounced back to the pre-Covid level. But if we compare it to the situation in retail trade or the processing industry, domestic services have been the least hit," the expert remarked.

But Nestor does not believe restaurants will take another hit come next year as Estonia's VAT hike of 2 percentage points will hardly discourage patrons.


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Editor: Marko Tooming, Marcus Turovski

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