ESA – ICAP: They forecast a reduction in turnover in catering for 2021 by 76.2 million euros

The turnover of micro-catering companies (1-9 employees) in the Attica region (excluding Piraeus, West Attica and Lavrio) in 2020 decreased by -537.5 million euros, while a decrease is projected for 2021 by -76.2 million . euro.

This emerges from a study by the Athens Chamber of Commerce that is being presented online at the moment. The study was carried out in collaboration with ICAP for the assessment of the financial damage from the pandemic for the catering industry, in the year 2020 as well as for the forecast for the year 2021 in the Attica region.

According to the data, the percentage change in sales in 2020 compared to 2019 amounted to -42.7%, while for 2021 a much smaller decrease is forecast by -10.6% compared to 2020.

In terms of turnover reduction, it is estimated that it reached -607.4 million euros in micro-catering businesses, in all sectors directly or indirectly related to the catering industry as suppliers (eg accommodation services, items food-beverages, wholesale, real estate, retail, etc.).

In addition, the decrease in the turnover of micro-catering companies in 2020 caused an estimated decrease in the income of catering employees by -139.9 million euros.

According to the research, employment in catering in 2020 decreased by -0.9%, while the forecast for 2021 estimates an increase of 3.5%.

Overall, the focus caused by the multiplier reduction of jobs in all sectors of the economy was estimated for 2020 at -20.4 thousand employees.

The industry focus on the pandemic

In 2020, due to the pandemic, about 50% of the catering companies were suspended due to a ministerial decision, while 21.2% were affected without suspension by joining a support framework.

63.5% of the catering companies joined a financial support measure with the labor being the category of support measures with the most important share. The guarantees follow, while the loan and tax ones cover smaller shares.

However, the majority of catering companies stated that the support measures were insufficient, while 29% consider that measures are sufficient but to a small extent.

Catering problems and concerns

The main problems and concerns of businesses regarding the market and consumers recorded in the survey of catering companies are:

– Uncertainty

– The division with the vaccinated and the unvaccinated

– The low rate of vaccination in citizens

– The reduction of customers due to the fear of the pandemic

– Reduced liquidity in the market

– The high percentage of unvaccinated customers at risk of losing all turnover

– Market instability and bad psychology

– Employment of employees with telework at home

– The status of the lockdown and the vaccination certificates of the disease

– The delay in the recovery of consumer traffic

– Teleworking and job suspension have led to a reduction in workplace consumption

– The ban on entry to the unvaccinated

– The control of customers when entering the stores

– Everyday life with the implementation of new measures

The problems and concerns about the companies themselves are:

– Lack of liquidity and reduced turnover

Lack of further incentives because existing funding is insufficient.

– The difficulty of retaining staff

– Coronavirus uncertainty, high rents and the difficulty of licensing the restaurant

Uncertainty about the immediate future

– The lack of support from NSRF and banks and the difficulty of accessing financing

– The increase in raw material costs

– The course of the purchasing power of the world

– Workplace insecurity. The coronavirus greatly affected the operation and consequently the viability of the company.

– The state is not friendly with small businesses in terms of insurance and taxation

The high competition from the entry of many new catering companies in the market

– The increase in operating expenses and additional debts created in the last 2 years

– The state legislative framework for business

– The tax framework for new investments

– New measures for coronavirus for vaccinated and unvaccinated in food businesses

5 Proposals of the entrepreneurs of the Catering sector for new measures.

Meters

From the research in catering companies were recorded various desirable measures of business support which are listed below.

The reduction of catering VAT is proposed by a large percentage of catering companies, while important support measures are the reduction of taxation, the extension of the rent subsidy and the subsidy of insurance contributions. The subsidy of energy costs, the reduction of municipal fees, the management of the coronavirus and the elaboration of the measures, the upgrading of the area, the revision of the repayable advance and the rest of the proposals with smaller percentages occupy a significant position.

The effect of focus on the economy and employment of the Attica region.

According to the study, the multiplier of economic activity of the catering sector is 2,002 which means that if the demand for catering services increases / decreases by 1 million euros then the total production / supply of all sectors of the economy of the Attica region will increase / decrease by EUR 2,002 million.

The employment multiplier for catering is 38 people, which means that if the demand for catering services increases / decreases by 1 million euros, then the total employment of all sectors in the Attica region will increase / decrease by 38 people.

Also, as mentioned in the study, the companies that are active in catering in the region of Attica (excluding Piraeus, West Attica and Lavrio) -regardless of size- amounted in 2018 (year with the latest available data) to 13,783 covering 4.8% of the total companies of all sectors in the geographical area, 1.4% share in sales and 8.1% in employment. It is noted that the number of legal units between 2001 and 2018 increased by + 26%, turnover by -4% and employment by + 70%.

Based on the available financial data of 2019 of ICAP DATABANK for 580 catering companies based in the Attica region, the very small companies covered 29% of the total, 6% of the assets, 9% of the equity, 6% of the total liabilities , 4% of sales, while showing negative EBITDA.

SOURCE: AMPE