ECONOMY

Food service fears wave of shutdowns

food-service-fears-wave-of-shutdowns

The clock is ticking ominously for thousands of food service enterprises, as the sector enters a fifth consecutive month of lockdown, with the exception of businesses offering takeaway and delivery services. If one adds the spring 2020 lockdown, the sector has been closed for the greatest part of the last 12 months.

The extended shutdown has hurt countless enterprises and their workers, with permanent closures already announced and sector representatives speaking of a “sudden death” in about 11% of food service enterprises. Given that the latest data have put the number of the sector’s companies at about 80,000, in the next quarter – when subsidies and handouts may stop – the sector will face an avalanche of layoffs and shutdowns.

According to Hellenic Statistical Authority (ELSTAT) figures, last year food service recorded losses of 2.28 billion euros, amounting to a 37.7% decline in turnover from 2019. This loss may not appear very high, but that is attributed to the fact the figures are based on the turnover declared.

A survey by the Small Enterprises Institute of the Hellenic Confederation of Professionals, Craftsmen & Merchants (IME-GSEVEE) shows that for nine out of 10 small and very small enterprises in the sector, the average turnover drop in 2020 amounted to 51.7%.

“The loss inflicted on the sector will only become evident in the next six months, and practically from the fall,” GSEVEE President George Kavvathas told Kathimerini: “Hope may spring eternal, and some entrepreneurs may try to save the day during the summer period, hoping for an increase in tourism,” he added. The survey points to 44.6% of the sector’s entrepreneurs worrying about the definitive closure of their business in the next six months.

Given that debts are piling up and cash reserves running out, it is unknown how many food service outlets, bars or cafés will reopen once the lockdown ends, even if it is just for the summer tourism season. It appears the sector will be forced to remain shut this Easter too, as it is expected to reopen in late May or early June.

GSEVEE data show that 43.24% of food service companies have no cash reserves left at all.