Christoph Elbert is the owner of the trendy restaurant “11a” in Hanover. He also has four other restaurants. Because of the return to 19 percent VAT on food from January, he has decided to close his trendy venue for three months. The restaurateur says his industry is facing a “heap of shambles,” and “time to protest and clean up.” ntv.de talks to him about staff shortages, prices and our own failures.
ntv.de: Your industry representatives are calling the return to VAT to 19 percent to the big gastro strike. You have decided to close your trendy restaurant 11a in Hanover from January to March. To what extent does such a long closing time, such a strike, make sense? What do you want to achieve with this?
Christoph Elbert: I prefer to call it a protest rather than a strike. We urgently need to draw attention to a few connections. The point is that the restaurant industry is struggling with several problems at the same time, one causing the other. The industry suffers above all from a lack of personnel. This means that I can no longer operate my restaurant during the opening hours like before Corona. There has been no lunch at 11a for three weeks. That means less sales for me. At the same time, energy and food prices have risen, and now there will be a VAT increase from January. For me it now makes more economic sense to close than to stay open. I want to draw attention to this with my example.
Restaurateurs are accused of being tax parasites. Can you understand that?
I’m not a tax parasite. If we could work at 100 percent, then the economic situation would be different and the higher tax rate would be understandable. But it’s not the tax rate alone.
There is no other option, for example to further adjust the opening times?
No, I can no longer compensate for the additional costs from January to March with the number of guests we have. I have 30 seats inside. For a good price-performance ratio, all places would have to be occupied three times in one opening time. But we can no longer do that.
We were never in a good economic situation during the cold season. But in spring and summer with a terrace with 160 seats, we were always able to make up for the weak months. With the first ray of sunshine the mail went off and we worked our way back. That was predictable…
And now not anymore?
No. This year we cannot be sure that we will recover everything. I will only open my restaurant if it’s worth it. For example for an event. However, I will manage this alone with the family. Otherwise, I serve strike soup and invite my colleagues to exchange ideas and to make themselves visible too.
You have ongoing costs, how do you finance these three months?
I have to see that. First, I put a budget aside.
They have several restaurants. Is the situation the same everywhere?
Overall, we have more and more closing times. At our headquarters in 11a, we used to be open seven days a week. Today there are only five. We are closed on Mondays and on Sundays – a day with strong sales – also because the employees wanted it that way. In the future, our wine bar will only be open on three days instead of five. Probably our pub too. Another of our restaurants is already closed because we can’t find staff. Only our cocktail bar will continue to operate at normal times.
What are the costs if you don’t operate your restaurant?
Between 8,000 and 12,000 euros per month.
Aren’t you afraid of losing even the last few employees?
For the most part, my employees will be staying in my other restaurants for the three months. Two out of a total of nine let their contracts expire because they want to change. But seven can join us again on April 1st.
In times of current staff shortages, how much more do you have to pay to have someone work for you?
I would say at least 30 percent more than before Corona. But I understand that too. Our employees also have higher costs and can go to the restaurant less. It’s all part of this complex crisis.
Ultimately, it’s only about an increase from 7 to 19 percent – twelve percentage points – more on on-site food. Drinks were not discounted, nothing changes here. This is the part from which the restaurant industry makes the most money. Eating outside the home is also not affected. Seen this way, the protest against the VAT increase seems like a storm in a teacup for many. How do you respond to these critics?
Hanover restaurateur Christoph Elbert says food in Germany is far too cheap.
(Photo: Christoph Elbert)
The problem is that we haven’t passed on the extra costs in full in the past because we were afraid of losing customers to cheaper competitors. From an economic point of view, this was a mistake; we would have had to radically adjust prices. Instead, many people said that we can’t increase it by 20 percent straight away, we might just increase it by a few percent at first. 12 percentage points due to the higher VAT from January probably add up to 30 percent for our restaurant, which we would have had to add since before Corona to make it worthwhile for us today. Unfortunately, we restaurateurs were too scared and cowardly the whole time.
So not everything would be good with a VAT at seven percent.
No. The upward price adjustments are overdue; they would have come with a delay. As I said, we were just too hesitant. Now we have this computational legacy. Eating out at a restaurant where the food is reasonable and of reasonable quality simply has to be a lot more expensive than it is now.
There is always talk of large losses in sales. But economists come to a completely different conclusion: The Evaluation of Mastercard payments has shown that sales in large cities, adjusted for prices, are even above pre-Corona levels. That means that overall it doesn’t look that bad.
It is important to look at how sales are developing in the various areas of the catering industry. Which concept is pursued, what is produced and at what price is sold. There are certainly many well-functioning restaurants. But I also know that restaurants that focus on quality tighten their belts. I’m not talking about a hamburger restaurant, a gastro chain or restaurants that reheat industrially prepared food. I’m talking about restaurants with skilled and motivated employees, where the product matters and where employees are paid correctly. That’s exactly where I don’t see such a positive mood across the board.
Didn’t this part of the catering industry simply miss out on an urgently needed structural change?
Absolutely. We restaurateurs have given people a fairy tale. We didn’t treat our employees or ourselves well, and we didn’t pay them well. We gave the guest the feeling that it was really great if they could eat something for ten euros. A visit to a restaurant in Germany was always too cheap. Now we are faced with a pile of broken glass that we have to clean up. That’s fine with me. The crisis must also be a challenge for an entrepreneur to reposition himself, to reposition himself and perhaps to develop a different form of his company.
Are you thinking about giving up and closing restaurants?
I’ve been thinking for a long time about how we can keep this company healthy. Closing for three months due to the complex crisis is, from an economic point of view, the less bad solution for us. I want to use this time to find out what else is possible.
Diana Dittmer spoke to Christoph Elbert