The founder of “Teremok” explained the rise in price of pancakes

The increased prices are not related to the lockdown and restrictions on the operation of restaurants, the rise in prices is determined by rising costs, said Mikhail Goncharov, founder of the Teremok chain. But he calls the current crisis the worst

Teremok, a chain of Russian cuisine restaurants, has existed for more than 20 years, but the current economic crisis caused by the consequences of the pandemic is called by the founder of the company, Mikhail Goncharov, the worst he has ever seen. In 2021, due to rising prices, Teremok was forced to purchase products at a higher cost, and this was reflected in prices for consumers. On average, pancakes have risen in price by 3–7 rubles last year, Mikhail Goncharov, the founder of Teremok, told RBC.

“We buy everything we need at higher prices and sell at higher prices,” the businessman said. “Teremok”, according to him, raised prices for different dishes in different ways: “For some pancakes we raised one or two rubles, for others – five, and there are pancakes, for which we raised ten.”

The increased prices are not related to the lockdown and restrictions on the operation of restaurants, the rise in prices is determined by rising costs, Goncharov assures. The increase in prices depended, in particular, on how much the price of a particular filling went up. Most of all, according to Goncharov, chicken fillet and salmon have risen in price. Chicken prices were affected by shortages of broiler meat and hatching eggs that arose in the spring and summer, but by autumn the situation stabilized and prices fell.

According to Goncharov, consumers reacted adequately to price changes at Teremka, because many of them had higher salaries last year. The restaurateur did not notice any global changes in their preferences during the lockdowns, as well as a shift in demand towards cheaper dishes.

Goncharov is sure that during a crisis, keeping the price does not lead to the preservation of consumers – they lose income and leave anyway, and the business loses profit even more. For a consumer who is used to going to democratic restaurants and can no longer afford these expenses, it is much easier to buy quality products and cook a dish at home than to start going to, for example, KFC, Goncharov believes. “I can’t imagine a person who went to a restaurant, and then, suddenly, he goes and orders nuggets at KFC. You can just buy good quality products, for example, sliced ​​u200bu200bsalmon, put on bread, ”explains RBC’s interlocutor. Guests who continue to go to restaurants, save money and “switch from their favorite pancake to the unloved one, just to eat with us” are not ready, Goncharov assures.

During the pandemic, the number of restaurants in Russia has not dramatically decreased, but many enterprises are operating at a loss or on the verge of profitability, Goncharov admits. The margin of safety, according to him, is different for everyone: “Someone closes in a month, someone closes after a year incurs a loss.” Although Teremok’s revenue in 2021 turned out to be higher than in 2020, it didn’t get it compared to the pre-pandemic 2019: in 2021 it amounted to 11.1 billion rubles, and in 2019 – 11 3 billion rubles, the company does not disclose indicators for 2020. Last year’s results were achieved by opening new restaurants and raising prices, adds Goncharov.

The need to check QR codes in shopping centers leads to a 10-30% drop in food court traffic, Goncharov estimates. The bill on QR codes in public places, in his opinion, “cannot be applied” – it will be ineffective, including because of the indifference to these measures by the inspectors themselves: “Quite a lot of establishments have one or two employees, they stand in the kitchen and behind the counter, just no one can check QR codes at the entrance.”

The investment attractiveness of the restaurant business has fallen sharply due to the pandemic, the businessman states. The development of serious brands is no longer interesting to investors, “because restrictions immediately kill profitability and change the payback model.”

The most popular were culinary and coffee shops selling coffee and prepared food. This format does not require large investments, and private entrepreneurs are willing to open them, says the founder of Teremok. The flow of investments also occurred in online and the development of digital services for restaurants. Now, according to Goncharov, the main engines for the development of the restaurant sector are “private entrepreneurs, entrepreneurs, self-employed people who open small establishments.”

Investments in opening small coffee houses start from 1 million rubles, Goncharov estimates. According to him, this format is even closer to the retail trade than to the restaurant market. If a coffee shop sells ready-made food, to open such a “restaurant”, you need a microwave and a coffee machine.

The costs of opening catering establishments have increased during the pandemic, but an entrepreneur who knows how to respond flexibly, even with rising prices, can remain with the same costs, the businessman is sure. “You can make a coffee house for 6 million rubles, but in this sense you can always simplify the concept: for example, take simpler wooden panels or finish everything with plastic,” notes Goncharov. It is only important to follow the rules of the game, depending on the segment in which you work – in an expensive restaurant, plastic furniture will be out of place.

About government assistance to the restaurant market

As the founder of Teremka said, the company received a subsidy in 2020, and last year it was able to take advantage of concessional loans at 3% under the Payroll 3.0 program twice. This is about program, proposed by the government to support entrepreneurs from industries recognized as the most affected by the pandemic: they could receive a soft loan at a rate of 3% per annum, provided that they retain at least 90% of their employees. By estimated Ministry of Economic Development, more than 26 thousand enterprises received preferential loans under this program.

“But not everyone received support because of the criteria that the business had to meet. It feels like 7-10% is covered,” says Goncharov. For many representatives of the restaurant market, this program, according to him, turned out to be unsuitable: “Many did not take it because they were not sure that they would not go bankrupt.”

The restaurateur noted that the issuance of subsidies to compensate for wages, as in Germany and the UK, could be a good measure of support.

In the summer of 2021, industry representatives said that it was their dialogue with the authorities that helped businesses “exhausted” from the effects of restrictions to achieve the abolition of QR codes for visiting catering establishments and relief in the form of a lifting of the ban on working at night for restaurants, bars and clubs. According to Goncharov, the dialogue between the authorities and the restaurant market has been established, but in some cases, business continues to face the lack of thoughtfulness of the measures introduced.

“In this sense, the situation in the summer of 2021 for food courts was disastrous. Measures were taken, Sobyanin’s order indicates that it is possible to sell takeaway, and such conditions were set in shopping centers so that visitors were not allowed to see the operators. It took several weeks to get an elementary piece of paper that you can still work, ”recalls the founder of Teremok.

According to Goncharov, 60% of Teremka’s revenue comes from food courts. In the summer lockdown of 2021, it sank twice.

In 2021, the founder of Teremka joined the coordinating council of Delovaya Rossiya and headed the restaurant business committee, and was also appointed public commissioner for large business under the business protection commissioner in Moscow. As part of the Ombudsman’s work, Goncharov sees his goal as creating conditions for the development of large businesses and network restaurant enterprises.

“In November, we held a discussion in the Federation Council, and in December, as part of a visit to Delovaya Rossiya, a dialogue took place with First Deputy Prime Minister Andrey Belousov and head of the Federal Tax Service Daniil Egorov on the abolition of VAT for restaurants with a turnover of more than 2 billion rubles. and up to 15 billion rubles,” says Goncharov, explaining that this is necessary to eliminate the giant jump in the tax burden of business from medium-sized businesses to large businesses.,>

According to Goncharov, Yegorov agreed with the inequality of conditions for large enterprises and SMEs. Now a proposal to smooth the scale of taxation is being prepared within the framework of Delovaya Rossiya. The issue of taxation is also planned separately for discussion at the Ministry of Economic Development. “In fact, the current regime is a closed, armored door to the development of such a business,” states Goncharov.