Restaurant business evaluated at Gaidar Forum

The expert discussion, The Seamy Side of the Restaurant Business in Russia, was held on January 18, the third day of 2018 Gaidar Forum, Russia and the World: Values and Virtues. The experts analyzed the potential of the country’s restaurant business, identified the industry trends and issues.

The moderator, President of the Federation of Restaurateurs and Hoteliers of Russia, Dean of  RANEPA Department of Hotel and Restaurant Business Igor Bukharov pointed out the industry’s biggest challenge, the new economic conditions. Restaurants have to build their business in the existing realities, where 99% of businesses are rented and, to operate legitimately, they have to obtain a bunch of documents which often contradict each other, he said. “The state wants to control – we want to work,” the moderator said, underlining the high entrepreneurial initiative. He also mentioned problems with foodstuffs which emerged in the import substitution period.

An expert in the restaurant business, Denis Yakhno, expects acceleration in this market. “We need to completely rebuild the entire business,” he said. “If we do not introduce automation, the market will outrun us.” Among the problems, the expert cited the low labor productivity. “Restaurants, unlike retail businesses, work at 30% of their capacity,” Yakhno said. Russian restaurants do not have enough market expertise; they lack skilled workers and interested investors. The expert urged restaurants to team up with food retailers to win the market race. “Either we work together, or we disappear,” he concluded.

President of the International Exhibition Project PIR Expo Ivan Merkulov mentioned more market trends. He, on the contrary, noted investor interest in the restaurant business and the growing number of start-ups. Today, according to the expert, Russia has come to a point of bifurcation, when the state should help businesses, not just control their work. Moreover, digitalization has opened access to others’ successes. The speaker also noted the role of sanctions for the domestic market. “Everything that has happened on the market in recent years has led the hospitality industry to actively shift to Russian-made foods,” he said. This market is growing fast in Russia.

Head of the RestConsult Restaurant Business Optimization Agency Sergei Mironov said Russian restaurants need to change their approach to the guests and improve the quality of services. Those willing to work and develop will survive, he said, also noting the positive effect of the sanctions. “We began to procure Russian fish from the north, something I could not do earlier. I used to export it, but now they are delivering it,” he said. The expert believes that, despite the competition of fast food and canteens, medium price restaurants are still viable. “In the next seven months, I am ready to open five more restaurants in the medium price segment – meat and fish,” the speaker assured. At the same time, he agreed that the authorities can easily shut down small restaurants today due to the lack of a proper regulatory framework.

President of the International Food and Gastronomy Center Leonid Gelibterman, Appreal CEO Andrei Suleykov, and President of Rosinter Restaurants Holding Sergei Zaytsevalso took part in the discussion.

The organizers include the Presidential Academy of National Economy and Public Administration (RANEPA), the Gaidar Institute for Economic Policy (Gaidar Institute) and the Association of Innovative Regions of Russia (AIRR).

The program outline is available at the forum website.

Participation is free; preliminary registration is required.

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The general partners of the Gaidar Forum are Gazprom and Gazprombank; strategic partners include Novartis, Johnson&Johnson, RZD, MSD, AstraZeneca, the ACIG Group of Companies, Mastercard, Coca-Cola, Russian Agricultural Bank, Pharmstandard JSC, Microsoft; O1 Group, Unilever, EY, Russian Brewers’ Union, Russian Direct Investment Fund are partners and RVC.

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