Glasses of beer and wine on a table in a restaurant in Helsinki in January 2014. Helsingin Sanomat has drawn attention to the difficult situation of restaurants in the Finnish capital, highlighting that bankruptcies in the sector surged by 70 per cent year-on-year in 2023. (Timo Jaakonaho – Lehtikuva)


STATISTICS point to a rapid decline of the restaurant sector in Helsinki.

Helsingin Sanomat on Tuesday revealed that the number of restaurants that went bankrupt in the capital city increased by 70 per cent year-on-year in 2023, from 41 to 71, according to data collected by Asiakastieto.

The hard times have carried over to this year, too.

A total of 16 cafés or restaurants had been declared bankrupt by the midway point of this month, representing no meaningful change from the corresponding period last year. Debt restructuring or bankruptcy applications have been received in recent weeks from, for example, the company behind Tortilla House, Fat Lizard Herttoniemi, Lily Lee and Fat Ramen.

The reasons are sundry, according to experts interviewed by Helsingin Sanomat.

Leo-Jukka Salonen, the restaurateur at Meiccu in Meilahti, Helsinki, stated to the daily newspaper that consumer habits have changed: consumers dine in restaurants less frequently than before and, when they do, they are more frugal, forgoing schnapps and cognac and opting for water instead of wine.

“Whereas previously most people ordered a starter, main and dessert, now they’re ordering just a main or possibly even only a starter,” he described. “It really is sad. If this continues, there won’t be small business owners like me 20 years from now. Only chains. This is a disappearing folk tradition.”

Underlying the change in consumer habits is the inflation unleashed by the Russian invasion of Ukraine in February 2022.

Jaakko Nors, a bankruptcy expert at Asiakastieto, reminded Helsingin Sanomat that inflation peaked at over seven per cent, affecting both ingredients and property costs, but restaurants were unable to raise their lunch prices to the same extent.

“In practice, all prices went up, but people’s wages didn’t,” he summed up.

“The large international players that are renting out commercial properties prefer not to lower their rents even if the market environment changed. They’d rather keep their properties empty.”

The effects of the coronavirus pandemic linger, too. The financial assistance received by restaurants during the crisis was not enough to offset the loss of revenue, forcing many restaurants to dip into their cash reserves to stay afloat. The shift to hybrid and remote work kindled by the pandemic, meanwhile, has decreased the number of patrons at lunchtime.

Nors revealed to the newspaper that as many as 17 per cent of companies in the restaurant sector are experiencing considerable financial difficulties. Finland, though, is not in alone in the situation. Also the Swedish restaurant sector has been struggling.

“In Sweden, bankruptcies were at a historically high level in 2023. There the biggest bankruptcy risk is currently in the construction sector, but the restaurant sector comes in second.”

Aleksi Teivainen – HT