Estonian restaurants say no escaping price hikes in the autumn

The rise in value-added tax that took effect in July has made many goods and services more expensive. Eateries are trying to avoid mid-season price hikes, but they acknowledge that customers have indeed become more price-sensitive in the current climate of overall price increases.
Restaurant owners say people have become more price-sensitive in response to rising taxes and inflation. But even more than that, they're sensitive to the weather. In Haapsalu, terraces only fill up once the sun peeks out from behind the clouds. When it rains, there's no shortage of seats.
"June was a frightening low point for us. We haven't seen a drop like that in the last three years — until this June. And now that July is ending, I can safely say it was purely because of the weather. We're just like farmers in that way," said Kaire Raba, head of Demorestoran.
Raba, who runs both a lunch bistro and a more upscale restaurant in the resort town of Haapsalu, says customers are cutting back mainly on lunch, but are still going out to eat. And this July has been the best of their three years in business.
"You can see it in the bistro. It's not that the number of customers has dropped, but when it comes to food choices, the first thing they leave out is dessert," Raba said.
"But at the restaurant, the average purchase has gone up slightly and we've seen more customers too. People are indulging in dessert, treating themselves to good wine and not saying no to a bit of champagne when there's something to celebrate. We're not seeing signs of cutbacks here," she added.
Demorestoran hasn't raised prices halfway through the season, but that likely won't be possible to avoid as winter approaches. Raba says she feels the pinch of rising costs most when ordering supplies for the restaurant. Because of her customers' price sensitivity, she's reluctantly had to swap out premium ingredients like white fish or lobster for more affordable alternatives.
"I would never, ever serve pork schnitzel in a restaurant. But we do now — and it's our best-selling item. I wouldn't normally cook with chicken thigh meat either. But today, it sells," Raba said.
Hapsal Dietrich, one of Haapsalu's most well-known restaurants, hasn't had any trouble drawing in customers either. Vacationers still want to treat themselves to something special. They, too, have not raised prices midway through the season.
"You can get a slice of cake for €7.90. We serve very large slices. Fortunately, in summer, it doesn't matter. We've got people from morning till night — right up until closing," said Hapsal Dietrich manager Jessica Jostmann.
While restaurants in resort towns may thrive on vacation traffic during summer, the good times usually don't last.
"Winters are definitely tough for businesses in small towns like this," noted Jostmann.
Kaire Raba said she's nervous about August. "I don't know what will happen when the tourists start leaving and the weather turns again. I don't know how the locals will respond," she said.
In the capital, customer traffic is more stable year-round. Tiina Kõresoo, who runs the restaurant Salt near the edge of Kadriorg, said they still get about the same number of guests as before, but people are ordering less. Families are also increasingly leaving their kids at home.
"Estonians are always accommodating. They don't order as many different dishes — they'll maybe just choose one. And likewise, just one glass of a drink to go with it. They no longer go for a whole bottle of champagne — just a glass of wine with the meal," said Kõresoo.
Except for lunch specials, Salt hasn't raised prices mid-summer either. But that won't hold through the fall.
"All of our suppliers have sent new price lists and we're not talking about a 2-percent increase. It's definitely more — 4 to 6 percent at least," Kõresoo said.
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Editor: Marcus Turovski, Aleksander Krjukov