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Restaurants: Russia Nowadays

Restaurants: Russia Nowadays

08 october 2020

As in most other countries of the world, this spring Russian restaurants and their customers found themselves isolated from each other. Over the course of the summer, the team of SWN spoke with 50 restaurants from all over Russia, to try to find out how the industry was surviving in these conditions. Here is what came out of this.

War & Pieces

In the heat of the summer, when the situation with COVID in the country had begun to improve bit by bit, Rostov restauranteur Adzhai Singh told SWN that the situation was like a state of war, and said: “the war is still going on.” This is at least the fourth economic crisis in Russia since the end of the 1990s. However, Alexei Vasilchuk, the co-owner of the largest restaurant holding in Russia, with more than 10,000 employees, called the current crisis “the most difficult and most unusual.”

Mathilda Shnurova, one of the key figures in the restaurant life of the culinary capital of Russia, St. Petersburg, described her challenge: “The first two weeks I just slept, 12 hours each day. When I finally gathered my team, I saw the detached expressions on their faces, and got scared. How could I unify them all again?” The team of Ms. Shnurova was saved and united by the launch of delivery service.  

Battle of Delivery

Those interviewed by SWN have widely varying attitudes toward food delivery, ranging from open contempt, to a desire to tie their futures to it. A division appeared from the beginning of the lockdown between those who already did delivery and those who did not. “Those who already specialized in delivery came out ahead,” concluded Ms. Shnurova. Her words corroborate the experience of restauranteur Genrikh Karpin. “We always understood that a restaurant should have normal delivery service. And now we see that delivery is an enormous business, and we need to pay more attention to it,” he said.

Many restaurant owners acknowledge that they launched delivery or take-out service not for the sake of profits, but “simply to keep working.” It was “so that the staff could work and not become discouraged, so that the kitchen didn’t stop working, so that we didn’t just turn off the ventilation and close up the restaurant,” and “to continue the dialogue with our guests.”

“Some wine places tried to develop delivery ... I talked to a few of them. Everything that they were doing was complete crap; it didn’t even cover salaries. It seems like sometimes it is better to just sit and do nothing,” feels Alan Bigati, of the popular Bigati Bar.

© Marcel Strauss/Unsplash

© Marcel Strauss/Unsplash

The Dark Lords

If we talk about delivery or “dark kitchens,” we need to talk about delivery aggregators. In Moscow the leaders are Delivery Club and Yandex.Yeda. “We work with all of the aggregators, but only for pizza. We didn’t add our other dishes for two reasons: borderline profitability after taking into account the commission of the aggregator, and the quality of the delivery,” they said at Capito Café. In the restaurant group Dreamteam they felt similarly: “We should all say a big ‘thank you’ to the aggregators, as at a particular moment they represented a good channel to remain connected to our guests, at least indirectly. But your own delivery service is always better.”

The president of the Federation of Restaurant and Hotel Owners of Russia, Igor Bukharov, is quite wary of aggregators. “I have always told all restaurant owners that for your money, for that 30% added to the cost of each dish, aggregators study the market and receive information from literally every block of the city: where pizza is more popular, where pasta, where burgers, where they usually order at night, and where in the daytime ... They will cooperate and set up a ‘black kitchen,’ and you will lose everything: first breakfasts, then lunches, and then completely all of your guests. This is a very serious problem.”

Time is a fast circle

Ekaterinburg restaurateur Kirill Shlaen describes: “A restaurateur always has postponed projects. At moments like this, everything speeds up a lot.” “In these 2.5 months, we implemented many things which we have been discussing for years,” echoes Sochi restaurateur Georgii Khvistani.

For many, this “logical niche” was online. “It is great that in this period, cooks have begun to use YouTube and Instagram actively to communicate with our guests, describing things and helping them to take a step forward in their understanding,” believes Kirill Shlaen. Restaurants going online he calls “the position of the future.”

One of the pioneers of Russian online restaurants, wine bar owner and head sommelier Mikhail Volkov, admits that everything online “already makes me sick.” He feels that “online wine tastings are a result of the crisis period, but they will stick around because they are convenient for many people.”

With a little help from my Friends

The most important thing for restaurant owners during this period was their relationship with their landlords. Everyone’s story was a little different. Mikhail Volkov notes that “we were able to agree about the rent – they cut us some slack. Of course not everyone was so lucky. Some of my colleagues had their rents reduced by 50% and were told to pay it back in six months. But many landlords who live outside of Russia said: ‘do whatever you want, we don’t care, we will rent to someone else, get lost.’” Mikhail Gokhner adds that “common sense appeared as the number of the sick grew.”

The Russian state did not provide the widespread support to business found in many countries, but even a little help from the government came as a pleasant surprise to restaurant owners. “In our country businessmen normally don’t count on help from the state. So when even such a small amount of help comes from the government, it is pleasant,” observed one source.

The future is dark and full of terrors

Alan Bigati sees a positive side effect of the lockdown, noting that “this crisis has cleaned up our restaurant field, as those who worked badly have closed.” However, Mathilda Shnurova is convinced that “now the process of survival of the fittest is only beginning.” By winter, many of the restaurants which triumphantly opened at the end of the lockdown may yet have to close down. “When they run up large debts by October, they will even envy those who decided not to open back up in the summer,” says Igor Bukharov. 

While most restauranteurs hope that at least some kind of clarity will come this fall, others are trying to get used to the idea of things being up in the air until next summer. “I would call that the ‘optimistic forecast of the development of events,’” cautiously muses Adzhai Singh. His “medium-pessimistic” forecast more or less aligns with the point of view of Tahir Kholikberdiev, the owner of popular meat restaurants in Moscow and Krasnodar, who says that “if there are no more similar flare-ups from next year on, we ought to be able to get things together again within two or three years.”

The most pessimistic case comes down to one thing: restaurants will not survive another lockdown. “A second wave would finish us off,” says Kholikberdiev. “If there is a second wave of restaurant closings, then all will perish, 100%,” agrees Igor Bukharov. 

Yet even in the land of Dostoevsky, there is room for optimism. “It’s actually not as dire as it felt at first,” admits Boris Zarkov, owner of the White Rabbit Family holding and one of the most influential contemporary restauranteurs. Vitaliy Bregadze is certain: “With the help of the Allmighty and trustworthy friends, we can always handle any situation.”

Cover photo: © Zach Vessel/ Unsplash.

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