Decline in Café Visits in Lithuania Amid Rising Prices, Survey Shows

A recent survey indicates that many people in Lithuania are opting to avoid eating out at cafés and restaurants due to significant price increases. Over the past six months, 34 percent of respondents reported they have stopped going out to dine altogether. Among the 65 percent who still visit these establishments, 39 percent maintain their previous frequency, while 22 percent are dining out less often, and a mere 4 percent are visiting more frequently.

Economic Challenges Highlighted

Tadas Povilauskas, an economist at SEB Bankas, highlighted the importance of the survey, stating, "That's a significant figure and seems to send a message that those in the catering services sector are trying to convey – that the situation is quite challenging." The rise in prices has led to serious implications for the restaurant industry, forcing many establishments into difficult circumstances.

Evalda Šiškauskienė, head of the Lithuanian Hotels and Restaurants Association, elaborated on the challenges facing the sector, noting that a recent discontinuation of the lower VAT rate, which had been in place since the Covid-19 pandemic, significantly affected restaurants. Several establishments have shut down, citing increased operating costs and the altered tax structure as primary reasons for their closure.

Struggling Industry

According to Šiškauskienė, the combined effects of a mounting tax burden, rising wages, and reduced consumer spending exacerbate the difficulties for eateries. "To stay afloat, prices would need to be 20% higher, as current profitability is near zero," she stated. She also expressed concern for smaller towns and rural areas, where cafes and restaurants face a heightened risk of bankruptcy. "When they close, it feels heartbreaking because social life in the region then comes to a halt,” she said, emphasizing the integral role these establishments play in local communities.

Consumer Spending Insights

Interestingly, Justina Bagdanavičiūtė, head of financial literacy at Swedbank, reported that spending on dining out has actually increased by around 12 percent compared to the same period last year. However, she noted that rising prices may have influenced consumer behaviors, with some individuals reassessing the value provided by what they are paying. "There are also people for whom rising prices have reached a tipping point – they start to scrutinize the price-to-quality ratio more carefully and choose to cook at home more often," she suggested.

Conclusion

The survey findings reflect the shifting dynamics in Lithuania's dining culture, indicating that while some continue to support local cafes and restaurants, a substantial number are reconsidering their choices amid economic pressures. The landscape remains uncertain, with operators in the restaurant industry facing increasingly challenging conditions as they navigate price hikes and consumer preferences.