Schorndorf in an outcry: boss calls for reduction in VAT for food!

Schorndorf in an outcry: boss calls for reduction in VAT for food!

The catering industry is facing a huge upheaval: Dietmar Haerer, head of the “Kesselhaus” in Schorndorf, expresses concern about the upcoming VAT increase for food. The veteran restaurateur, who has been in the industry since 1979, responds to a report about increased daily meal prices in the region. Haerer is calling for a reduction in VAT in order to help restaurants that are often burdened at the moment Zvw reported.

The situation is becoming even more explosive since the traffic light coalition has now decided to let the reduced VAT rate of seven percent on food expire at the end of 2023. This could have catastrophic consequences for many catering businesses. Federal Finance Minister Christian Lindner (FDP) emphasizes that this regulation was intended as a crisis aid, but looking back at the high inflation rates and the explosion in food and energy costs, the step is seen by many as irresponsible. The Daily Mirror quotes Lindner, who blames the other coalition partners for the decision to return to the regular tax rate of 19 percent.

Risks for the catering industry

The restaurateurs' concerns are understandable: According to an analysis by economist Marcel Fratzscher, price increases of around ten percent can be expected in the catering industry. What is particularly threatening is that an estimated 70 to 80 percent of these additional costs will be passed on to customers, which could place additional strain on already strained budgets. The catering industry could thus enter a downward spiral because, according to DEHOGA, many businesses could face a drop in sales and even closure. WLW reports from numerous restaurateurs who fear slipping into the red if prices have to be increased due to the tax increase.

But the industry is also creative and adaptive. Some restaurants, like Sticks'n'Sushi, introduce a points system to increase customer loyalty. Others, like the Schuback am Park restaurant, are temporarily lowering prices to attract more guests and stabilize sales. L’Osteria relies on digitalization to optimize its business processes and better determine service needs. Such approaches could be helpful, but they do not provide a lasting solution to the massive challenges facing the restaurant industry.

Conclusion and outlook

The alarm bells are ringing in the catering industry: The combination of an impending VAT increase, high inflation and rising operating costs represents a huge risk for many restaurateurs. Dietmar Haerer and his colleagues are at a crossroads: How much are they prepared to change prices without losing contact with the community?

Time will tell whether politicians respond to calls for a more sustainable solution, such as a permanent reduction in VAT. Until then, catering businesses in Baden-Württemberg and beyond must arm themselves and remain creative in order to survive in these uncertain times.