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‘It’s a death sentence for our business’: How a pioneering Stockholm food truck lost out on Covid-19 support

A Californian-Israeli food entrepreneur behind one of Stockholm's first food trucks has recently learned the business will not qualify for Sweden's coronavirus business support programme, despite being pushed into a loss last year. Erez explains how he fell through the gaps.

'It's a death sentence for our business': How a pioneering Stockholm food truck lost out on Covid-19 support
Erez Ofer busy at work in his food truck. Photo: Falafel Stockholm

Erez Ofer and his wife Stephanie started their food truck family business, now called Falafel Stockholm, in 2014, hoping to recreate the hummus, falafel rolls, and fresh salads they had enjoyed while living and studying in Tel Aviv. 

From the start, their food truck has been a hit, catering for conferences for companies like H&M and Björn Börg, and big events like Stockholm Pride, and even being featured in an advert for the accounting software company Visma. 

But the onset of the coronavirus pandemic meant they had to rapidly change their business model. 

“We barely had any catering or events, so we had to work our asses off with the food truck,” Erez says.

“We had to have the truck open for lunch and dinner every day, in different parts of the city, all over, because you’re only allowed four hours in the same spot, and we were able to have only a seven percent reduction in summer sales compared to the year before, which I’m really proud of.” 

Photo: Falafel Stockholm

What he didn’t realise is that all of this extra work would turn out to be counterproductive due to the increased costs it required and the criteria for receiving government support.

In order to receive support under the Swedish government’s coronavirus business support programme, called ‘omställningsstöd’ or ‘adjustment/transition support’, a business needs to show a minimum drop of 40 percent in sales. 

But Falafel Stockholm’s huge adjustment efforts actually led to decreased sales. 

The problem was that in order to keep sales steady, the business has significantly ramped up its costs, pushing it into a net loss. 

“It took a toll on the costs of the company, because we had to be open for much longer, we had to have our employees there for much longer, more driving, all that kind of stuff,” says Erez.

As a result, the company expects to make a loss of about 300,000 kronor this year on 1.5 million kronor in sales. 

It was only at the start of March 2021, after waiting more than six months to be able to send in a request for Omställningsstöd for August to October 2020, that he learned that his business would not qualify. The Swedish Tax Agency has been directed to only consider sales reductions of 40 percent when considering the economic impact of coronavirus on a business.

This is not the only way that Falafel Stockholm has fallen through the gaps. To be able to take the food truck out daily, he and his wife have hired more staff. But he can’t get help paying employees’ wages under the korttidspermittering (short-term lay-offs) system, which allows employers to temporarily get the government to supply up to 60 percent of employees’ salaries, if their working hours are reduced. 

“Based on their policy, if you’re able to hire new people, then you don’t need korttidspermittering and they’re not thinking that sometimes as a business, you need to grow in order to be able to survive.” 

“If you’re only looking at the sales, it doesn’t tell the whole picture of what’s going on in the business, and it’s not just us, there are a lot of other businesses that are having similar problems.” 

But despite contacting authorities to explain the situation, he said he has only received a standardized answer to his letter that he did not find helpful.

Eva Bodén, an advisor at the Swedish Tax Agency, said that Erez is not alone in his frustration at not qualifying support. 

“There are a lot of others who think they are losing out because of the way this has been set up,” she said, adding that many businesses had also seen their support reduced when the rules changes in July after a decision by the European Commission.

“It’s always the case that when you bring in a law that there are some people who don’t benefit.” 

She said that many restaurants, which have seen revenues fall after they were stopped from selling alcohol in the evening, and then closed after 8.30pm, were likely to qualify. 

The Vegan Schmegan truck, as it was previously called, at the Matholmen food festival in Stockholm. Photo: Falafel Stockholm

In January, before learning that they would not be eligible for omställningsstöd, after seven years searching and with the help of investors, Erez and Stephanie opened their first restaurant in the Vasastan district of Stockholm. 

Despite great reviews and an enthusiastic reception from the couple’s regular customers, the restaurant’s sales are being depressed by the pandemic.

“I’d say, it’s probably on average about 5,000 or 6,000 kronor a day, which is not enough to get by,” Erez says. “Considering our costs, we need around 7,000 or 8,000 minimum per day, which I think is a very reasonable expectation. I’m not in this to be greedy or get filthy rich. I’m doing this because it’s something I feel passionate about, fresh homemade food.” 

However, even this extra money means that their business will not qualify for omställningsstöd for all of the coming year, despite shouldering heavy start-up costs. The couple say this is basically a death sentence to the business. 

The Falafel Stockholm restaurant has got great reviews but hasn’t been as busy as hoped. Photo: Falafel Stockholm

Right now, Erez, Stephanie and their five children are going deeper and deeper in debt to keep the business going. 

“We can’t afford to pay taxes, so we are having to go into debt and take a loan from the tax authorities, and we’re going to have to take another loan from ALMI (Sweden’s state-owned bank for small business startups) to help us get through this as well.

“But you know, there’s personal liability for these loans, and also there’s an interest that needs to be paid. It’s really tough, we have paid our taxes for years, we and all of the other small businesses in similar situations have gotten royally screwed.” 

Member comments

  1. You had me on-side at the start, but opening a restaurant in the Vasastan district during Covid and whilst the food truck business is making a loss and reduced sales, and without knowing whether you qualify for government support, is a HUGE risk and irresponsible. Why would the government be responsible for back-stopping a private business taking this amount of risk? I’m afraid you’ve made some miscalculated decisions and should count yourself lucky and grateful to have received loans on this basis

    1. Because the government has already dismantled responsibilities for its citizens. What can we hope from such a greedy and calculating government?

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WORKING IN SWEDEN

Ten easy-access cafés and libraries to study or work from in Stockholm

Whether you are a student looking for a place to study or someone who works remotely and is looking for a new atmosphere, Stockholm caters to a diverse range of preferences and needs.

Ten easy-access cafés and libraries to study or work from in Stockholm

At times, it’s necessary to seek out a fresh workspace or study environment to enhance our focus and productivity.

Here’s our selection of Stockholm cafés where you can enjoy a cup of coffee and the aroma of the beans in the air, to libraries where you can completely get into the zone and options that give you a chance to network in an office-like space.

Stockholm City Libraries

If you like to work in a quiet and peaceful place, then one of Stockholm City’s Libraries might be the place for you. It offers work and study places, free Wi-Fi and they also have printing facilities. A library card is not required to access the library, but if you want to borrow or reserve books then it is needed.

More information and to find the closest library to you, can be found here.

Stockholm University Library

The library on Stockholm University’s campus is open to everyone. This library has a mix of quiet work areas as well as noisy sections. Most seats have power outlets available, students and those who have access to Eduroam can use that network, but a temporary login can be found at the library entrance. In addition, there is a café and two shops situated within the same building.

More information can be found here.

Location: Universitetsvägen 14D, 114 18 Stockholm

KTH Library

Another university library which is open to everyone is the KTH Royal Institute of Technology’s library.

Here you can find a number of quiet places to work and study, with the majority of seats equipped with power outlets. Eduroam’s wireless network is available throughout the library along with a guest network, details on how to connect to this can be found at the information desk.

Café Stories is located in the entrance hall, but be aware that no foods, such as sandwiches, wraps or salads are allowed in the quiet sections of the library. Snacks and drinks which have lids are allowed in.

Find additional details here.

Location: Kungliga Tekniska högskolans bibliotek, Osquars backe 21, 114 28 Stockholm

Goto 10

Goto 10 allows its members to access work lounges, hold events, record podcasts and test a 3D printer all within their premises (they’ve also got hubs in Malmö and Linköping). The membership is free and in return you are asked to contribute to creating content for Goto 10.

Their lounges include Wi-Fi, seating with power outlets, microwaves and a coffee machine.

Information about Goto 10 and how you can become a member can be found here.

Location: Hammarby kaj 10D, 120 30 Stockholm

Scandic Hotel

The hotel group Scandic offers co-working spaces and a hotel room office in their hotels. Prices for their co-working spaces start from 99 kronor per day and it includes free Wi-Fi, power outlets, coffee and tea, printing and copying services, and a 10 percent discount on food.
The co-working spaces are available in all 270 Scandic hotels, in six countries and 26 of those are in Stockholm.

More information and a price list can be found here.

Bröd & Salt

The café chain Bröd & Salt has shops all across the city. The chain also offers a workspace subscription called Club Salt, which gives you access to six of their co-working spaces. These workspaces are located in Torsplan, Jarlsgatan, Odenplan, Kungsholmen, Fleminggatan and Uppsala if you want to venture outside the capital. They offer shared spaces to work, with power outlets and Wi-Fi, and the subscription comes with a discount on a variety of menu items sold at Bröd & Salt.

Subscriptions for the co-working space start from 599 kronor per month.

More information can be found here.

Espresso House

You can find Espresso House in many corners of the country. They may be part of a chain with everything that entails, but they are popular spots to work from, which is evident from the many laptops that can be seen when you enter. The cafés usually offer free Wi-Fi and some seats have a power outlet as well. It is important to note that it could get a bit loud in the café.

Find your closest Espresso House here.

Waynes

Another café chain in Sweden and in Stockholm is Waynes. The company has a number of shops across the city and like many cafés it provides free Wi-Fi and a certain amount of power outlets. If you do not want to travel too far, but still want a nice coffee shop to work from then Waynes fits that description.

Find out more here.

ilcaffé

Another popular café to work from is ilcaffé. Located in Bergsgatan, Drottninggatan, Långholmsgatan and Södermannagatan, this café has free Wi-Fi and a number of power outlets. The café offers a range of sandwiches, treats and coffee, so there is no wonder why it has become a popular work hub.

Information about ilcaffé can be found here.

Urban Deli

The hotel, restaurant and café chain Urban Deli has five shops in Stockholm. They are located in Sveavägen, Nytorget, Sickla, Centralen and Hagastaden. The shop in Sveavägen in particular is a popular spot used by those who want to enjoy a coffee or a meal and work or study away. It has free Wi-Fi and power outlets at certain seats.

You can find more information here.

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