German Restaurants Push for Price Hikes as VAT Cut Fails to Offset Rising Costs
Economy / Finance

German Restaurants Push for Price Hikes as VAT Cut Fails to Offset Rising Costs

Despite a reduced VAT rate, 22 % of restaurants plan to raise their prices. The figure comes from a Dehoga survey of nearly 700 establishments that the “Handelsblatt” covered in its Thursday edition.

Dehoga president Guido Zöllick told the newspaper that the sector remains under significant pressure: sales are falling while costs-especially payroll, partly due to the minimum wage increase of €1.08 to €13.90-are rising. “The VAT drop on food served on-site to seven % is an important step toward strengthening the industry” he said, adding that more than one‑fifth of the businesses now feel obliged to cut staff. Likewise, more than 22 % of owners reported that they are raising prices.

Zöllick pointed out that many restaurants are operating at their limits. Thirty‑four point eight percent describe their commercial situation as bad or very bad, and one‑in‑two venues suffer from falling customer numbers, net sales and profits.

The number of insolvencies increased again in 2025, rising by roughly 32 % to 1,819 cases, according to the credit bureau Crif, which the “Handelsblatt” cited. Crif currently flags 14,400 gastro‑businesses as at risk of insolvency. “Small, family‑run venues are especially affected” said Crif Germany director Frank Schlein. They often lack the financial resilience to absorb the rising costs.