Hard hit by quarantine, restaurants lose revenue, shut down

Ukraine’s restaurant business has taken a heavy blow from the country’s coronavirus quarantine.

Since the government shut down most public spaces on March 17, Ukrainian restaurants and cafes have suffered from extreme revenue losses, salary cuts and layoffs. Then, on April 4, Prime Minister Denys Shmygal announced that outdoor restaurants would be able to end this run of bad luck and resume their work starting on May 11. 

But for many eateries, it may be too late. They won’t be able to open up ever again, according to analytics by Poster, the developer of a high-tech inventory system for restaurants.

As of April 30, over 65% of Ukraine’s cafes and restaurants have either entirely suspended their activities or closed down for good because of the coronavirus lockdown, Poster stated. Those still providing takeout and delivery earn 50% less.

Fine-dining restaurants have been most affected: Over the first four weeks of the quarantine, they generated 61% less revenue.

The income of Ukraine’s bars and burger restaurants has decreased by half. Fast food and sushi places have generated 30% less income.

Delivery, on the other hand, has suffered the least. Its monthly turnover fell only by 13%.

Mykyta Poturayev, deputy chairman of the Ukrainian parliament’s humanitarian and information policy committee, said on April 30 that 12,000 out of 30,000 restaurants and cafes had already closed down in Ukraine. The enterprises were liquidated and will not resume their work after the quarantine, Poturayev added.

The Ukrainian lawmaker estimated that 40% of hotels, restaurants and cafes closed down because the parliament failed to adopt amendments to the national budget in its first attempt. These amendments aimed to provide a legislative foundation for launching the force majeure procedure. That would have provided businesses with some tax relief and given them the right to request their rent be cancelled or delayed. Without it, these businesses couldn’t fulfill their lease obligations, Poturayev said.

Despite a ban on restaurants providing dining service during the quarantine, some continued to work. During a Cabinet of Ministers meeting on May 4, Ukrainian Interior Minister Arsen Avakov said that the police had detected restaurants in Kyiv, Rivne Oblast, Donetsk Oblast  and other parts of Ukraine violating the quarantine.

On April 27, Ukrainian journalists from the investigative media outlet Bihus.info reported that elite Kyiv restaurant Velour had continued welcoming guests during the lockdown. Velour is part of the restaurant empire of Mykola Tyshchenko, a lawmaker from the ruling Servant of the People party. The journalists recorded lawmakers, top officials and influential businessmen visiting the restaurant. Tyshchenko said that the restaurant had served as a “headquarters” and hosted only “individual” meetings.

On May 2, Ukrainian restaurant owners organized a rally in front of the Presidential Office in Kyiv to demand the right to open outdoor terraces and to call for fair treatment for all restaurants. Protesters brought chairs, tables and antiseptic and served food on the street.

On May 4, Prime Minister Shmygal fulfilled their wishes and promised to allow restaurants to open terraces and provide takeout service starting on May 11.