The unrest on Maidan not positive for restaurateurs

Photo: Konstantin Melnitsky

Owners of restaurants located on Khreshchatyk may shut down their establishments in 3–4 months if they don’t see a revival of the flow of clientele. CEO of the Chateau restaurant (Kozyrnaya Karta chain) Viktor Husak says that its visitors now can relax on the summer terrace overlooking the barricades on both sides of the establishment. But such scenery is not very attractive for the clients. “In June our attendance dropped three times compared to the same month last year”, said Husak. The average bills also dropped to UAH 90 per customer.

The Buddha-bar found itself in a similar situation (Mirovaya Karta chain). Commercial Director of the Mirovaya Karta chain of restaurants Vitaliy Shadchnev said over the period of February – June its sales dropped four times compared to the same period in 2013 and the average bill decreased 10–15% to UAH 550–700 per customer. “Most places on Khreshchatyk are still open, but many are sustaining serious losses”, sums up CEO of the Restaurant Consulting company Olha Nasonova. According to her estimates, establishments in the central part of the city are losing UAH 14.5 mn every month.

Downtown dive

The low level of attendance of customers is typical for all restaurants in downtown Kyiv. Over the period January-June the demand has dropped by 15–20% compared to the same period last year due to decrease of solvency, as was mentioned in our previous issues. However, restaurants located in downtown Kyiv have their particularities. In this district rental payments are traditionally high and according to the co-owner of the Fanera Project (Banka fan-bar, Zheltok cafe) Maksim Khramov they could reach US $60 – 80 per square meter per month. “In the most popular places rent rises to US $100 per month”, he says. Given the low attendance, such costs have become overwhelming for business owners.

As a reminder, restaurants in the center of Kyiv repeatedly shut down their business during the mass protests in February. Some were closed for only a few days, others for a few weeks and some have still not re-opened for business. For example, the Vodka Bar club, which closed in February, is still not open to the public. “Most of our customers are foreigners, but they fear walking along Khreshchatyk at night”, says co-owner of the establishment Oleh Sheinker.

Solo Pizza on Maidan Nezalezhnosti is also closed. Co-owner of the restaurant Sayed Sharaf Nasser explained that the barricades are obstructing the access of suppliers delivering food products to the establishment. For this reason, he sees no point in reopening the restaurant for the time being.

Time until autumn

Stores were the first to leave the downtown area in Kyiv. CEO of Fiba Retail Ukraine (Marks & Spencer and Gap chains) Bulent Temel said in a conversation with Capital that the Gap flagship store on Khreschatyk will be closed in a month or so. In early June the company will close another retail outlet – Marks & Spencer. Restaurateurs are still holding up.

“Many expect that visitors will gradually begin returning to these establishments,” said the expert. If the protesters’ tents are not removed until that time, Nasonova predicts that 25% of the 200 restaurants still operating in the central part of the city may go out of business in late September – early October.

Ihor Nikonov, head of the group of advisers to the Kyiv Mayor, said in a conversation with Capital that talks with the protesters in downtown Kyiv are simultaneously being held by several organizations. Despite this, none of them have managed to reach an agreement on clearing of the center of Kyiv. “Many protesters are insistently waiting for the parliamentary elections”, he explained.

As a reminder, President Petro Poroshenko in his inaugural speech called for early parliamentary elections, but the exact date has not been set. After life in Kyiv is brought back to normal, it will take a long time for the heart of the city to revive its attraction for restaurateurs. “Seeing as Khreshchatyk became a symbol of mourning of the deaths of innocent protesters, it will not in the foreseeable future become a place of entertainment for local residents and foreigners for that matter,” says Nasonova.