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Profit or Survival ?


Indeed , it is a question that every investor especially those in the F&B business should be asking , are we opening to make some profits or just opening for survival ?


So many reasons are leading to this reality ! just to name few ...


1- Ongoing restrictions in different forms that are not in business favor , either local rules such as restricting people from dining in if they don't have the vaccination passports ! or International laws which restricts new visitors or tourists to come and visit the country .


2- Increased competition that is taking different forms , new Ghost kitchens doing delivery , more grocery stores that are preparing full meals and filling up their displays with salads , sandwiches and ready meals to go ? not to talk about more and more local and international brands are mushrooming in every single country around the globe...


3- Lack of staff ! before we used to talk about the lack of "qualified staff " but this is not the case even as even "Industry interested " candidates that operators are willing to train from scratch but needing these candidates to work certain shifts or hours and have certain commitments are rare to find in our days ! we can see many operators reducing operating hours and closing one or more days a week as a result ...


4- Increased expenses , this includes staff expenses where you can't count on hiring staff and paying minimum wages, if you want to attract good talents you have to pay for that , also cost of goods and products is on an ongoing increase due to increased in shipping and transport costs which doesn't seem to be stabilizing anytime soon .


5-Increased competition might limit your ability to increase selling prices from another end !


6- Rents are back to increase again , for those who have negotiated certain reductions in rent during Covid period , now are getting surprised with new rent increases by their landlords especially those who's contracts are coming to an end !


7- Increased governments taxes , after all support during the Covid period for businesses, now it is time for Governments to start applying new taxes or increase existing tax rates...


All of the above and many more other challenges such as impact of third party delivery fees , technology and the long list of other expenses that doesn't seem to get any shorter for restaurateurs and hospitality management companies overall , are all reasons and pressure points on profits , so we can call it a "Survival period " more of less .... hoping for better and brighter days for the "Hospitality industry" .



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