Brazilians go to restaurants less and hold back

Since the free movement of people was resumed, after the most intense phase of the pandemic, designer Luísa Tessari, 25, is being more careful in spending on bars and restaurants. A resident of Saquarema, on the coast of the state of Rio de Janeiro, she and her parents used to go to restaurants every 15 days before covid-19. Now, exits are rare.

“Not only the price of food, but the price of everything is higher. We end up having to adapt expenses and see what is necessary or not”, says Tessari. “You have to choose between going out or paying a bill.”

A fan of Japanese food, she has avoided establishments of this specialty, which are traditionally more expensive.

The designer is part of a portion of the population that, before the pandemic, went to restaurants more often and ordered food at home. With high inflation, it was necessary to adapt.

Is it really more expensive to eat out? Data from the IBGE (Brazilian Institute of Geography and Statistics) show that, from the end of 2019 (before the pandemic) to June 2022, food outside the home was on average 16.5% more expensive.

It is less than the general inflation for the period, of 21.3%, but it indicates that Brazilians are, in fact, having to spend more in bars and restaurants.

What is the consequence? With a tight budget, it’s natural for families — like Tessari’s — to make choices when it comes to spending.

In the last two months, the rise in prices in bars and restaurants was above average inflation. In May, eating out became 0.61% more expensive and, in June, 1.26%.

Impact on consumption

Dentist Eduardo Oliveira dos Santos, from Ponta Grossa (PR), has preferred to cook at home

Image: Disclosure

Dentist Eduardo Oliveira dos Santos, 31, also had to adapt to high prices. A resident of Ponta Grossa (PR), he has traded trips to bars and restaurants for lunches and dinners at home.

“Before, I went out more. Now, especially in the last year, I have preferred to buy products at the supermarket and cook at home”, he says. “Although the products in the supermarket have also increased in value, I noticed that cooking pays off.”

Santos explains that he has been reducing spending on food outside the home since the beginning of the pandemic. “Before, I went to restaurants at least once a week. Now, if it’s once a month, that’s enough.”

Impact on restaurants

High inflation, especially food prices, has raised the cost of restaurants. From the end of 2019 to June this year, food and beverage inflation was 33.5%. In June alone, the increase was 0.8%.

Are restaurants passing on costs? The problem is that, in order to keep customers, many establishments are holding back the transfer of costs to the menu.

A survey by Abrasel (Brazilian Association of Bars and Restaurants), carried out with bar and restaurant owners across the country between June 21 and 28, shows that there are difficulties in readjusting prices. 1,689 businessmen in the sector were heard.

The main results of the survey are the following:

  • Pass-through of the cost increase: 45% say they have readjusted below inflation; 29% did not make adjustments; 23% increased with inflation; 3% rose above inflation
  • Profitability: 35% say they made a profit in May; 29% had losses; 36% were in balance

According to the president of Abrasel, Paulo Solmucci, on average the establishments are registering a good frequency of customers in recent months, since the movement of people was resumed. Average revenue is also growing.

So what’s the problem? Solmucci explains, however, that not all establishments are managing to pass on the cost of inflation. In the last Abrasel survey, the percentage of entrepreneurs who made adjustments below inflation or who did not increase prices is 74%.

In addition, although the frequency of customers has not decreased, considering the average of all establishments, Solmucci says that bars and restaurants aimed at the middle class are having more difficulties.

“The top of the pyramid is easier to pass on prices, to receive customers. Even because it serves a more wealthy class”, he explains. “The base is also better, because there is aid. The restaurants more focused on the middle class, in class C, are suffering more.”

Difficulties to readjust

Businesswoman Eliana Maria da Silva Ferreira, from the Box 49 restaurant, in Belém (PA), and her daughter, Kely - Press Release - Press Release

Businesswoman Eliana Maria da Silva Ferreira, from the Box 49 restaurant, in Belém (PA), and her daughter, Kely

Image: Disclosure

Businesswoman Eliana Maria da Silva Ferreira, 54, has faced difficulties in passing on the costs. Owner of two units of the Box 49 restaurant in Belém (PA), she updated the menu about a month ago.

“But when the customer arrived, he ended up complaining”, he says. “I often did the old price.”

Specializing in seafood and typical foods from Pará, Box 49 saw the profile of its clientele change during the pandemic, in the midst of the economic crisis.

According to the owner, many old customers are gone — and those who stayed are spending less.

“I had clients who came every Sunday with their family. Today they come once a month,” he says. “In the past, a family of four would ask for a [prato de] shrimp and a fish with açaí. Now, she just asks for the fish and divides it”, she exemplifies.