The German Dining-Out Industry 2014/2015 – Caterers and Restaurateurs on the Upswing

Published in frozen food europe 1,2/2016 Heat, The Soccer World Championship, and tourism blessed the German dining-out industry with a good turnover in 2014/2015. The sector economy was only clouded by the loss in sales of two large franchises. However, decisive questions remain unsettled for the further development.

It was only a small inconspicuous beef patty. Outside of the franchising companies, no professional cook took it seriously. With pieces of lettuce, tomatoes, and a little bit of sauce in a soft bun, it was soon sold by the tons, not everywhere, but in many countries, and in Europeans countries too. In the Netherlands, McDonald’s started the European conquest, Germany followed shortly before Christmas in 1971, when Johann Hovan opened the first restaurant of the chain in Munich. At first, one only found hamburgers in quick service gastronomy, some time later, they were in fast casual restaurants too: today they are offered almost everywhere in the dining-out industry. And there is still an unbelievable amount of potential sales volume in them. An example of a current hamburger success story is the German owner-operated chain “Hans im Glück”, named after a well-known fairy-tale figure. In 2013, five years after its founding, they were ranked 132 among German franchising companies (top 100 + 56 “ante portas”) with their 13 establishments (self-management and franchise). Their winning formula is called “trading up” + “fast” + “casual” + “full service”. In 2014, there were already 30 establishments with a turnover of 44 million €. The hamburger grill chain has vaulted up to the rank of 66[1] – a trend, which a German franchise company has rarely accomplished in 12 months.

The Food Service Industry – Driver of Development

This development is not typical for the entire fast food and catering trade, even though they experi-enced a successful year in 2014. With a turnover of 12.1 billion €, they have grown somewhat over 2.2% in comparison to the previous year (the numbers for 2015 will be published in the spring of 2016). All of the six sub-segments (quick service, trade, recreation, transportation, full service brand-name catering, and events/fairs/sport) were able to profit from this positive development. Their growth rates were between 0.3 and 8.5%. Quick service stagnated, because McDonald’s and Burger King’s sales declined by 2.9% resp. 5.7%. The developments of both of these two players had such a strong impact on the entire segment, because they account for just under 60% of the entire volume. Burger King Germany’s problem, which was caused by one single large franchisee in 2014, seems to be solved. All of the other franchises record average growth rates of somewhat over 5%; only a few of them reported stagnating or declining commercial activities. The trend in corporate and community catering was also positive, at least as far as one can tell from the turnover figures of the catering services for company cafeterias and cafeterias for universities (those kind of numbers aren’t available for hospitals and nursing homes). In 2014, catering services for company cafeterias had a turnover of 6.6 billion €[2], 428 million € in the 995 catering services for universities. Consumers spent somewhat over 71 billion € in the entire dining-out industry. That means a growth of 2.5%. However, for the food suppliers, the volume of the goods and materials employed is clearly more interesting, because the additional charges of the food service industry are included in the turnover. The goods and materials employed climbed somewhat over 4% to 17 billion € over all segments of the market. Due to its positive trend, the food service segment is also the “driver of development” in 2014.

2015 – The Golden Year with Clouds at the Turn of the Year

2015 has the best prerequisites to become a very strong year in the history of the German dining-out industry. It was unusually warm. With 40.3° C, there was a new heat record, and it didn’t rain for weeks. The drought, which was caused by this, was on the one hand ecologically fatal, but on the other hand a gift for open-air gastronomy. In addition, The Soccer World Championship went down in Brazil during this time. All of the public viewing locations were optimally filled to capacity. Being that the team around captain Lahm brought the cup home, the mood to celebrate was spurred on and the gastronomical sales connected to this. Positive influences also came from tourism. From January to September 2015 alone, the number of overnight stays climbed by 3.2% to an all-time high of 341.4 million; foreign guests accounted for 18%[3]. The industry received somewhat of a setback by the statutory minimum wage of 8.50 € per hour, which was introduced after many years of discussion. Caterers and restaurateurs complain less about the lower limit of the wages, as about the administrative procedures which are connected to this, especially with recording work accounts.

ffe_1u2_2016_01_19_Germany_foodservmarket_2015_purchvol2016 – Mixed Perspective

The perspectives for the dining-out industry are quite good for 2016. Nevertheless, it will be difficult to reach the prospective results from 2015 again (there still aren’t any sound annual figures). The economic framework is indeed relatively stable; the German Federal Bank forecasts slight, upward stable trends for the important indicators, like the gross domestic product, export, or employment, for the others, like the inflation, stable trends.
One of the most important questions is how the country is going to deal with the refugee issue. How much money has to be spent for their housing and integration? Without doubt the German Government has to invest a lot of money initially into coping with the flow of refugees. Another question is how successful the German society will integrate the refugees in private and working life – the imponderables are considerable. Of course the medium-term-chances are also considerable above all in relation to the labor market, because less and less working persons have to provide for more and more elder fellow citizens. 2016 will become a highly interesting year.

[1] food service 4/2015
[2] Jochen Pinsker, npdgroup deutschland GmbH; Vortrag Deutscher Kongress für Gemeinschaftsverpflegung 3/2015
[3] DEHOGA -Konjunkturumfrage Herbst 2015