“Our costs have gone up by 20 to 25 percent, which is too much to pay off our debts from the corona period on time. So we prefer to take matters into our own hands, and we will close from July 1,” says Mathilde van der Ploegh, co-owner of Nett Soulfood & Drinks in Apeldoorn.
Costs have gone up for almost everything, from purchasing a carton of milk to a bottle of wine, to emptying trash containers and personnel costs, van der Ploegh explains.
She says she uses organic products and they are much more expensive than the “regular” ones. “As a result, we now have to charge €15 for a sandwich for lunch and €10 for soup. It’s not that customers think the prices are too high, we can raise our prices even more, but we don’t want to, there are limits, you also have to Stand behind what you sell.”
When Nate started it was a different story. “But now we get even, that’s not what you do it for.” In addition, Van der Ploeg and her partner received a lot of corona support during the corona pandemic, and now that they work virtually for nothing, paying that support back on time will be difficult, says Van der Ploeg.
Diadem’s debt will be paid off, but then she and her partner will do something completely different. “My partner is going to sell the furniture, I have no idea yet. Anyway, it won’t be any different in the hospitality industry, you will continue to incur huge costs.”
The vast majority stop themselves
Figures from the Chamber of Commerce show that Van der Ploogh is no exception. In the first quarter of this year, 2,337 catering establishments were closed, of which only 177 went bankrupt.
The vast majority of catering businesses, 92 percent, closed because the owners themselves gave up. In recent years, food industry owners have largely stopped themselves.
Karen Sekema, owner of the Wintertuin Experience in Baarn, is also calling it quits. Wintertuin’s restaurant industry will shut down on July 10. Sikima wants to keep the escape room open though.
Sikima’s problem is its high energy bill. Wintertuin Experience is housed in a former greenhouse. It’s a nice building, but heating costs are high in the winter. And in the summer it can reach 40 degrees, so the costs of cooling, for example refrigerators, also go up.
In addition, high greenhouse maintenance costs and other excess costs affect Sikima. “If only maintenance and energy costs had increased, we would have totally internalized it. But now everything is getting more expensive across the board, and that combination is no longer possible.”
During Corona, Sikima received support from the government. But since it only launched the Wintertuin Experience in the middle of 2019, the drop in turnover during Corona has been low compared to last year.
As a result, more than half of the NOW subsidy must be paid back, according to Sikima. An amount over 25,000 euros. This contributed to the decision to quit smoking.
More bankruptcies in 2023
Only one in three hospitality entrepreneurs can fully or significantly afford the high costs, He writes Also economist Katinka Jongkind, who follows the service sector of ING Bank, in a report.
According to her, this is much lower than in other sectors. She says restaurants and cafes in particular struggle to pass prices fully on to the guest. After all, if the price of a beer or meal becomes too high, guests will turn away. According to Jongkind, hotels are less price sensitive and can pass on higher rates more easily.
Jongkind says profit margins at restaurants and cafes have been under pressure for some time. And she believes that in 2023, the number of catering establishments that close or go bankrupt will rise “exponentially,” in part because catering companies are now obligated to pay off their tax debts.
In this video, you can see how smart innovations can reduce costs in the hospitality industry:
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