Starting a Restaurant: Get to know the potential (episode 1) 6 years ago

The customer at table 12 gently raises his hand. You notice it immediately and pass over to him. “Can I buy another beer?” He asks. You nod thankfully, go over to the bar, take a Tuborg Classic, enter the sale on your cashier system and attach the bill as you pass him the beer. The awning has been pulled out. Not because it’s raining. But because it’s clear sky and the sun is shining. All tables are occupied – inside and outside. You smile and you are happy about today’s sales. It has been a good day. It has been like that the last few months and every day is just getting more and more fun. “I made the right choice,” you think and it’s spot on and what you’ve always dreamed about!

The dream of running a restaurant, cafe or coffee shop is appealing and the scenario can come true if things are taken care of. The restaurant industry is hard. Some think it’s one of the hardest. And that’s for a good reason. In this blog series you get insight into the industry. You get tips and tricks for getting started with the business and what issues you should be aware of.

The restaurant industry in numbers and trends

The world has become familiar with the Nordic food wave! The restaurant industry is experiencing increasing sales due to local and international interest. So far, it has been especially the people from Copenhagen who have felt it, but an analysis from PwC shows that other regions also benefit from it. However, the Nordic food wave does not get all the credit. Due to rising economic conditions, Danish purchasing power and customer satisfaction have also increased. Landbrug og Fødevarer has conducted an analysis that shows that the Danish people eats on restaurants, cafes, fast food, etc. once a month. The figures indicate that especially cafes, bars and fast food places in this regard are more visited. Youngsters especially visit these places while the audience over 50+ for comparison more often prefer hotel restaurants. The special thing about ordinary restaurants is that all age groups visit this type of eatery quite often. This means that 20% of the Danish population goes to the restaurant at least once a month.

In other words it’s good times in the restaurant industry. This applies to whether you have a café, bar, food truck, street kitchen, restaurant, hotel restaurant or the like. Statistics from Statistics Denmark shows that the turnover from the industry hit record in 2017 compared with previous years. The total sales have increased by 54 per cent. From DKK 27, 8 billion in 2009 to DKK 42.7 billion in 2017. And as turnover increases, the number of employees in the industry also increases. From 2009 to 2017, the employment has increased by 50 per cent to 95,300 employees. It sounds appealing to move into the restaurant industry and there is certainly a potential to get a turnover from it. The question is whether there is money to pick up on the bottom line? The customers are there. The purchasing power is there. But the combination of increased competition and the lack of control over production costs means that many people have to turn the key around before even getting started. Statistics from Statistics Denmark show that, in line with more sales and more employees, there have also been several bankruptcies in the Danish restaurant industry. Since 2009, the number of bankruptcies has grown from 250 to 409 nationally. For others, however, it has not gone wrong with a bankruptcy, but despite the fact that it has gone wrong, the key has to be reversed. In PwC’s annual industry analysis from 2017, they point out that 34% of the contributors in their analysis (945 restaurants) had a negative result in 2016. It is therefore a big part in the industry that is struggling to get positive numbers on the bottom line.

We know that the environment for creating a healthy business is there. We just need the right knowledge and the right tools. Look out for the next blog post and become more aware of how to ensure a bulletproof concept that can be the driving force of running a successful restaurant.


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