Over the past six months, 34 percent of people said they had not gone out to eat or visited a cafe. Of the 65% who did, 39% said they went as often as before, 22% visited less frequently, and 4% went more often than previously.
"That's a significant figure and seems to send a message that those in the catering services sector are trying to convey – that the situation is quite challenging," said Tadas Povilauskas, an economist at SEB Bankas.
"Declining consumption is also a significant factor in the current situation in restaurants. Everything has really become more expensive, restaurants are struggling, and prices are high," said Evalda Šiškauskienė, head of the Lithuanian Hotels and Restaurants Association.
Recently, the government has discontinued the lower VAT rate, which had been in force since the Covid pandemic. A number of restaurants have since closed, citing the changed rate, as well as a spike in operating costs.
According to Šiškauskienė, catering establishments are struggling not only due to the tax burden and rising wages but also because of declining consumer spending.
"To stay afloat, prices would need to be 20% higher, as current profitability is near zero," she said. "We envy countries like Spain or Italy, where tourism flows are steady, [...] so businesses can plan and operate. Here, the situation is very complicated."
Restaurants and cafes are especially prone to bankruptcy in smaller towns and rural regions, according to Šiškauskienė.
"When they close, it feels heartbreaking because social life in the region then comes to a halt. There are restaurants where locals go for celebrations, and life stops when they close. This trend is becoming more pronounced," she added.
Justina Bagdanavičiūtė, head of financial literacy at Swedbank, said their data showed that customers were also spending more on eating out.
"Compared to the same period last year, total spending on restaurants and catering establishments increased by around 12%," Bagdanavičiūtė said.
The rising prices could have influenced the result, she said.
"There are also people for whom rising prices have reached a tipping point – they start to scrutinise the price-to-quality ratio more carefully and choose to cook at home more often," Bagdanavičiūtė added.
Newsletter
Every Friday morning.
