The Restaurant Business in Ukraine Faces Challenging Times

Ukraine has faced its most challenging winter since the onset of the full-scale invasion, with restaurants opening and closing one after another, yet managing to prevent the industry from collapsing entirely. The Ukrainian restaurant industry is currently experiencing a state of constant turbulence due to the war. New business approaches have yet to be devised, while existing models have proven ineffective. Despite these challenges, cities continue to witness the opening of new establishments and experimentation with various approaches and formats. However, on the flip side, there are mass closures driven by rising costs and a decline in customers' purchasing power.

This topic was discussed by Svitlana Mironova, co-founder of LaFamiglia Restaurants and a hospitality expert, along with Alex Cooper, one of the most prominent restaurateurs in the country, whose establishment, Tatar Bunar in London, has been recognized by the Michelin Guide. On April 2, in an interview, they explored the overall state of the restaurant sector from Cooper's perspective, who has opened over twenty restaurants in the past ten years, half of which he has since closed. He continues to create new formats even amidst the war.

When Mironova asked Cooper how he manages to remain so active in his work, he immediately dismissed any rational explanation for his endeavors. He stated that opening establishments is not about business decisions but rather an internal need: 'I do what I love, and I love creating spaces and atmospheres. For me, that is key: I will do it as soon as I have the opportunity.'

Cooper candidly expresses that he views his restaurants not as traditional enterprises but rather as a form of creativity. However, circumstances dictate the scale of his operations. During wartime, new openings can range from large restaurants to small kiosks selling shawarma or pastries—what matters is the process of creation. He emphasizes that living in a war-torn environment only heightens this sense of urgency. The awareness of the fragility of the future propels him to act now rather than wait for 'better times.'

Mironova inquires: 'What is currently lacking: time, people, establishments, ideas?' From his perspective, Cooper explains, 'I believe things will only get worse. Unfortunately.' Nevertheless, he sees the crisis not as an end to movement but rather as an opportunity to discover new niches: 'But it varies for everyone. Some will see opportunities in this, while others will take action. Ultimately, some spaces will become available, people will adapt, the market will shrink, but some will fail.' He further articulates his main thought regarding the current era: 'In short, we are entering a classic era of change. If you are unwilling to adapt and wish to preserve past successes, this is a very poor era. If you are ready to evolve and seek out opportunities, you will undoubtedly find them.'

From the conversation, it becomes clear that the primary issue in the industry is the economics of establishments. 'All costs are rising, and there are numerous stories that reduce profits, alongside many that increase costs. These are classic economic scissors.' On one hand, Cooper explains, restaurants are grappling with a sharp rise in expenses, while on the other, they face a decline in demand: 'At the same time, the number of people in Ukraine is decreasing, their financial resources are diminishing, and their willingness to dine out is waning. Thus, on one side, expenses have increased, while on the other, people are stopping going to restaurants.'

According to the creative entrepreneur, what is most lacking at present is 'intelligence': 'Because old models are ceasing to work, and you don’t yet know the new ones. Everyone is trying to cling to outdated paradigms, and it’s evident that they are ineffective. Everyone is in search mode. This is a crisis of methods, to put it more accurately.'