SWI swissinfo.ch: Record restaurant closures blamed on strong franc

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Record restaurant closures blamed on strong franc

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This content was published on May 28, 2018 12:21 PMMay 28, 2018 - 12:21
A restaurant in Lucerne

A plastic chef attracting/scaring off customers in front of a restaurant in Lucerne
(Keystone)

More than three times as many pubs and restaurants disappeared in Switzerland last year as the year before. The catering industry points the finger at the strong franc, responsible for more bankruptcies (+4.4%) and fewer new openings (-25%).

Some 2,220 places to eat were removed from the trade registry and 684 went bust in 2017, according to a reportexternal link in the SonntagsZeitung based on data from the industry umbrella organisation GastroSuisseexternal link and Creditreform. With 2,048 restaurants opening, the net loss was 856.
resto graph

Graph of Swiss restaurant closures

GastroSuisse president Casimir Platzer blamed the strong franc and deferred investments for the record number of closures. These were particularly high in cantons Ticino, Bern, Geneva, Lucerne and Zurich.

“The strong franc is really squeezing businesses in the mountains, in the countryside and in border regions,” he said, explaining that there weren’t enough guests, and therefore turnover, in an industry with already small margins.

Platzer said that in tough times it gets harder to find someone to take over the business. He added that fewer children were prepared to work the long hours necessary, often for lower salaries.

The SonntagsZeitung said additional factors were changing eating habits and less time for lunch.
Italian elections trouble Swiss franc

A tumultuous political power struggle in Italy has put further pressure on the Swiss franc by weakening the euro in recent weeks. One of Europe’s largest economies has been virtually rudderless since an inconclusive general election in March.

After the franc briefly weakened to the symbolic CHF1.20 ($1.21) mark against the euro in April, the exchange rate dipped to 1.15 due to the inability of Italian political parties to agree on the composition of a government.

The deadlock worsened with the collapse of the Eurosceptic coalition of the Five Star Party and the Liga party. This happened after Italy’s President, Sergio Mattarella, blocked the appointment of a cabinet member to the proposed new government.

The former executive director of the International Monetary Fund, Carlo Cottarelli, is now being tipped to head an interim government as prime minister. Mattarella, who is facing fierce criticism for his role in the debacle, still has the option of calling fresh elections.

The political deadlock in one of Europe’s largest economies has weighed down the value of the euro. The single currency rallied slightly after the collapse of the proposed coalition, which at one stage had threatened a referendum on whether Italy should stay in the euro.

But foreign exchange markets expect further volatility as Italy seeks to find a stable government. That in turn could strengthen the franc further against the euro, to the detriment of Swiss exporters and the domestic tourism industry.
end of infobox


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"max commented on the content at 27 May 2018 17:48".
max max 27-May-2018 17:48
To blame this mainly on the strong franc is a bit simplistic. It is certainly a valid argument in touristic places. For many Swiss residents the discretionary spending money has been shrinking during the past few years (healthcare costs, new taxes). So, it should not surprise anyone that a lot of working citizens choose a take-away lunch for less than half the cost of a regular restaurant menu. Some have also figured out that the price of a daily coffee taken in a bistro, at the end of a year, buys a high-end espresso machine. As Lynx recently commented, once upon a time, we would have a restaurant meal several times a week. Nowadays, it is less than once a month...
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 "Otto replied to the comment of max at 27 May 2018 22:08."
Otto 27-May-2018 22:08
I absolutely have to agree on healthcare and taxes. And supporting a wife and kids, fixed costs are absolutely terrifying.
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 "Edmunds replied to the comment of max at 27 May 2018 22:42."
Edmunds 27-May-2018 22:42
Those Germanzz.. And their trade surplus!! Never willing to spend an extra cent. There are loads of restaurants that need to rethink their added value, their service, concept and bloody finally start investing.
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 "Joan replied to the comment of max at 28 May 2018 07:51."
Joan 28-May-2018 07:51
I really don't know the business from inside, but "an industry with already small margins"?

A cola can is around 0.70chf in Migros, and you are charged 4.5chf tipically in Luzern. A bottle of wine costing 14chf in a restaurant can easily be 50-70chf. A dish of french fries (50-100gr) can be 10chf, a bag of 1kg is 3.90chf in migros.

Maybe the statemen is correct, but from the client point of view is hard to believe.

Additionally, I've already got my list of favorite restaurants and they are always full. So maybe what is disappearing is the bunch of regular restaurants that don't really bring anything in terms of price and quality. And I agree with Max: when people is carefully selecting where to go, only the restaurants with the best ratio price / quantity / quality will survive.
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 "La la la replied to the comment of Joan at 28 May 2018 15:38."
La la la 28-May-2018 15:38
Agree with all of you, guys.
Those places with good service, menu and price-quality ratio are quite successful.
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 "max replied to the comment of Joan at 28 May 2018 16:19."
max max 28-May-2018 16:19
joan, Running a restaurant in Switzerland is no longer a goldmine. Especially in bigger cities, restaurateurs have to face rental expenses anywhere between very high and exorbitant. This explains why you often find places in the suburbs or on the country side where they serve good quality food at a reasonable price. BTW, if Migros had not acquired most of its properties several decades ago, its sales prices would be quite a bit higher...
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 "Joan replied to the comment of max at 28 May 2018 19:45."
Joan 28-May-2018 19:45
Thanks for the insights Max.

With so many factors in play, blaming the franc it's ridiculous.
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"Simon S commented on the content at 28 May 2018 07:08".
Simon S 28-May-2018 07:08
It's not very surprising for people who live in Switzerland. The culture of going out to eat here is almost dead. When one has to pay at least 40chf per person people don't decide to eat often in a restaurant. Go to Spain and compare their eating culture with Switzerland. People will go out to restaurant often even multiple times a week.
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 "PIERRE replied to the comment of Simon S at 28 May 2018 08:49."
PIERRE 28-May-2018 08:49
I would also add that in today's world, consumer rating sights like TripAdvisor allow customers to provide feedback on food quality and service. In Geneva a large % of the traditional restaurants have poor customer service and rely too heavily on foot traffic, the simple fact is that if you provide mediocre food at a high price your days are numbered.
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 "max replied to the comment of Simon S at 28 May 2018 16:03."
max max 28-May-2018 16:03
Simon, You are right about culture. Smiling Spanish service personnel whose excellent service you do not have to buy with a huge tip. In terms of food quality, you can find anything from harmful for your health (my own experience) to 'haute cuisine'. Asking local people for recommendations is always useful. Prime beef costs less than a third and other ingredients are also a lot cheaper in many European countries. So, it is quite normal that you get more value for your money.
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"Schooner27 commented on the content at 28 May 2018 11:44".
Schooner27 28-May-2018 11:44
Having lived here for 10 years my experience of Swiss restaurants is an overwhelming lack of value and service. It is true there are good places, with good service but they are rare & still expensive. Frankly, it feels as though restaurants are not considered part of the service industry by their owners and are simply just another job. This applies in both tourist locations and the ordinary towns. As for investment in premises this appears non-existent since the 1970s.
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