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ECONOMY

Restaurants in German cities see revenues rise after crisis years

The gastronomy sector in major German cities is finally enjoying better times despite multiple crises in recent years, according to a new study by the Ifo Institute.

A waitress delivers drinks to guests at a Stuttgart restaurant.
A waitress delivers drinks to guests at a Stuttgart restaurant. Photo: picture alliance/dpa | Bernd Weißbrod

The study indicates that restaurant revenues have rebounded in Berlin, Hamburg, Munich, Stuttgart, and Dresden, with inflation-adjusted figures even surpassing pre-pandemic levels.

“There’s an upswing in the gastronomy sector after the Covid-19 pandemic, despite the war in Ukraine and inflation,” said Simon Krause, one of the study’s authors.

However, he cautioned that the cities surveyed have particularly affluent populations. Rural areas may not be experiencing the same recovery, and data on tourist consumption, which remains below pre-pandemic levels, is not available.

Analysing the last six months, including the fourth quarter of 2022 and the first quarter of 2023, the study shows a consistent increase of at least 20 percent compared to 2019 across all cities. Munich and Hamburg recorded even higher numbers, while Berlin showed significant growth.

Carla Krolage, another author of the study, explained: “Establishments were able to pass on some of the increased costs of personnel, food, and energy to consumers without losing their customer base.”

Restaurant prices have risen more than the overall inflation rate, according to data from the Federal Statistical Office.

READ ALSO: EU forecasts German economy in recession in 2023

The Ifo researchers also observed a shift in the gastronomy landscape. Business in the usually lower-revenue outskirts grew proportionally more than in city centres.

Saturdays and Sundays saw above-average increases, possibly influenced by the increased prevalence of remote working, with more people eating out in their residential areas.

The German Hotel and Restaurant Association (Dehoga) recently expressed a less optimistic view of its members’ situation.

They reported that summer business had been worse than expected, although this period falls outside the scope of the Ifo study.

Dehoga also raised concerns about rising costs and called for the continued reduction of value-added tax for their industry.

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POLITICS

Germany’s biggest companies campaign against far right parties ahead of the EU elections

Germany's biggest companies said Tuesday they have formed an alliance to campaign against extremism ahead of key EU Parliament elections, when the far right is projected to make strong gains.

Germany's biggest companies campaign against far right parties ahead of the EU elections

The alliance of 30 companies includes blue-chip groups like BMW, BASF and Deutsche Bank, a well as family-owned businesses and start-ups.

“Exclusion, extremism and populism pose threats to Germany as a business location and to our prosperity,” said the alliance in a statement.

“In their first joint campaign, the companies are calling on their combined 1.7 million employees to take part in the upcoming European elections and engaging in numerous activities to highlight the importance of European unity for prosperity, growth and jobs,” it added.

The unusual action by the industrial giants came as latest opinion polls show the far-right AfD obtaining about 15 percent of the EU vote next month in Germany, tied in second place with the Greens after the conservative CDU-CSU alliance.

A series of recent scandals, including the arrest of a researcher working for an AfD MEP, have sent the party’s popularity sliding since the turn of the year, even though it remains just ahead of Chancellor Olaf Scholz’s Social Democrats.

Already struggling with severe shortages in skilled workers, many German enterprises fear gains by the far right could further erode the attractiveness of Europe’s biggest economy to migrant labour.

READ ALSO: INTERVIEW – Why racism is prompting a skilled worker exodus from eastern Germany

The alliance estimates that fast-ageing Germany currently already has 1.73 million unfilled positions, while an additional 200,000 to 400,000 workers would be necessary annually in coming years.

bmw worker

, chief executive of the Dussmann Group, noted that 68,000 people from over 100 nations work in the family business.

“For many of them, their work with us, for example in cleaning buildings or geriatric care, is their entry into the primary labour market and therefore the key to successful integration. Hate and exclusion have no place here,” he said.

Siemens Energy chief executive Christian Bruch warned that “isolationism, extremism, and xenophobia are poison for German exports and jobs here in Germany – we must therefore not give space to the fearmongers and fall for their supposedly simple solutions”.

The alliance said it is planning a social media campaign to underline the call against extremism and urged other companies to join its initiative.

READ ALSO: A fight for the youth vote – Are German politicians social media savvy enough?

It added that the campaign will continue after the EU elections, with three eastern German states to vote for regional parliaments in September.

In all three — Brandenburg, Thuringia and Saxony — the far-right AfD party is leading surveys.

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