Full-Service Restaurants in Hungary

PROSPECTS

Full-service restaurants benefit the most from the lowered VAT

Operators had high hopes when VAT on served meals and non-alcoholic drinks was lowered to 5% in January 2018. However, it has not resulted in lower menu prices to secure enough margin to cover mounting expenses and the 4% tourism development tax on net sales.

Quality and loyal staff is the bottle neck to future growth

All operators face great uncertainty before peaks in tourism with short summer periods. The shortage of labour is often a burdensome issue as the level of wages is not competitive with the offers of foreign operators in Austria, Germany, or other Western European countries.

Full-service restaurants join online ordering platforms

Preordered Christmas menus for takeaway have been an option for several years and full-service restaurants have gradually become open to accepting online orders from their loyal customers. Joining online ordering platforms, such as netpincer.

COMPETITIVE LANDSCAPE

Restaurateurs build their own network and aim for international recognition

Full-service restaurants lacks domestic chains, but some restaurateurs have built up a network of outlets with very different kitchens and styles. Zsidai Group, which also has the Hungarian franchise rights to the Jamie’s Italian brand, runs several outlets in Budapest.

Morphing outlets into entertainment centres is a new way of differentiation

Full-service restaurants discover new ways to differentiate themselves and attract guests by creating special events. The aim is to enhance customer engagement, offer exclusivity for frequenters, and increase loyalty.

Franchising is not an attractive option, with very few chains

Full-service restaurants is dominated by independent outlets with a focus on traditional Hungarian meals. Pizza full-service restaurants stands out from other cuisine options in terms of chained outlets, but this segment also lacks chains outside Budapest.

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