Can Delivery Service Only Really Keep Croatian Restaurants Afloat?

With the new set of Croatian Government measures introduced and now fully in force, cafes and restaurants, among other facilities deemed unnecessary to be open, have had to close their doors. Croatian restaurants with delivery services can still function, but can they really keep their businesses going relying on delivery alone?

As Poslovni Dnevnik/Marija Crnjak writes on the 20th of March, 2020, while cafes have absolutely no choice but to wait for the coronavirus crisis to peak and for better days to come, many Croatian restaurants are planning to keep going with their delivery services, despite the fact that their profits are trimmed by it.

Although everyone has to undergo registration and meet the minimum technical requirements for food delivery, Croatian restaurants often find it pays more to simply shut down and lay staff off during these harsh work ban conditions with reduced traffic, unless of course the Croatian Government passes more concrete measures to help retain these jobs which are now very much just hanging in the balance.

This was stated by Marin Medak, President of the Croatian Hospitality Coordination Group, when he was asked on Thursday if Croatian restaurants could keep their businesses running relying purely on deliveries and whether they were properly trained for the concept.

As is well known, new coronavirus spread prevention measures are now firmly place, which include the closure of all catering/hospitality establishments, with one exception being for the preparation and delivery of food. For starters, about 10 percent of restaurant workers have given up or quit because they are at risk and want self-isolation, Medak claims.

“It’s either people who have some chronic illnesses, are older, or have a family member that is in a vulnerable group, and we can’t count on those people. Others are keen to keep the business going as much as possible, some are shutting down, most will agree to a minimum wage, everyone wants to participate in resolving the situation,” revealed Medak, who plans to use recently introduced government measures and hopes that the criteria for the payment of minimum wages from the state budget will soon emerge.

But for other measures, those in the Croatian restaurant industry say they simply aren’t adequate.

“Our projections say that if the situation normalised by May the 1st, which is difficult to imagine, 5 to 10 percent of people can be expected to get fired. If it lasts until July the 1st, that is a drop in turnover of about 30 percent and a third of hospitality workers will lose their jobs, and if we welcome September still in this then we’re already at 80 percent reduced turnover and it will be devastating,” Medak explained.

This would mean that from an annual turnover of around 15 billion kuna, the hospitality industry would see their revenue drop massive to around 2 billion kuna, realised only during 2020’s first two months.

Half of the revenue is generated by tourists, while the rest is generated by domestic guests, who are still not travelling.

“We need a lot of traffic from deliveries to cover all the costs. At first, we don’t expect that to blossom, because people have purchased supplies for their homes, but when this panic subsides, who knows, maybe they’ll start wanting deliveries,” Medak concluded.

Drazen Boban, head of the Croatian Chamber of Commerce’s caterer’s association and the owner of the Vinodol restaurant, pointed out that the transition to food delivery will be better handled by those who have already done so and have experience in it.

“Delivery services take a pretty high commission and the ones that have had their own delivery services previously will do better out of this,” he noted. Otherwise, Vinodol closed three days ago because there were no guests, and they are already at a loss.

Boban hopes that the government will revise the measures to help the economy that are complicated and insufficient, and even with minimum wages given, without some write-offs, there will be no results for the state.

”Zagreb has an advantage here, unlike in Dalmatia where there are fewer people and the habits are different. Therefore, we need to develop different models and come up with solutions, which we’re working intensively on,” reveals Stipe Jelicic, Boban’s deputy at the Croatian Chamber of Commerce.

Follow our dedicated section for rolling information in English on coronavirus in Croatia.

 

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