Moscow restaurant market is thriving
The restaurant market in Moscow is booming – growing 25% year-on-year. Analysts predict the country’s regions will follow the same trend soon. And as the cost of living is growing in Moscow, owning a restaurant is becoming a very profitable bus
The market is growing remarkably – by 25% each year – but opening a restaurant in Russia's capital remains more expensive than in Europe.
Eating out was not common in Russia during Soviet times, when there were only a few restaurants, most of which were not particularly enticing.
But things have changed In the last decade – Moscow's restaurant market has grown dramatically in that period. Last year it was worth $US 4.5 BLN.
Apart from fast-food chains, the number of luxury restaurants is growing as the tastes of clients get more sophisticated.
Russian patrons expect their money to buy not just quality food but also excellent service.
The biggest investment in a single Moscow restaurant is reputed to be around $US 17 MLN.
“The market is growing dramatically by 25-30%. More and more Russian companies are developing their business despite the lack of new technologies, skilled staff and high taxes. We are working closely with the government to improve the current situation,” commented Igor Bukharov, restaurateur, Moscow.
However, owners of Russia’s top eateries say the market still faces challenges because of a lack of catering colleges and skilled staff.
Opening a restaurant in Russia requires twice as much capital as in Europe – due to poor infrastructure and the high cost of loans.
“I can mention three major problems: a lack of suitable premises, poor infrastructure, and very high cost of loans. All these factors make it unprofitable to open new restaurants in Moscow,” explained Aleksandr Grinev, the Head of Pizza Fabrica Company.
There's still money to be made at the fast-food end of the market. Restaurant chain Rosinter, which operates the Planet Sushi, Il Patio and TGI Friday's, was the first company from the country’s booming dining sector to float its shares on the RTS.
Some analysts say this is a path that others are likely to follow.
“The most profitable type of business is fast food chains, that can raise capital by having an IPO. Though I am sure opening a luxury restaurant in Moscow can also be profitable. I can say the main problem for the restaurateurs in Russia is a lack of staff,” stated Aleksandr Sorkin, Moscow restaurateur.
Moscow is aiming to become a major player in the competitive global restaurant market, offering a range of cuisines to cater for all tastes and budgets.
And according to the country’s leading restaurateurs, the successful development of the sector in Moscow will be followed by similar success in the regions.