The new president of the CAEB Restaurants Association in Mallorca, Juanmi Ferrer says that the time has come to reduce restaurant prices.
He acknowledges that in recent years the prices have increased across the board. One reason was that people had saved during the pandemic. Once the restrictions were lifted, they went out and spent. Prices reflected this. The association's former president and now vice-president, Alfonso Robledo, observes: "The bottles of wine and cava were joyously opened."
Ferrer points out that businesses in Mallorca have higher costs than on the mainland. Rents are generally higher. Products cost more. Salaries are higher. "We have the best hospitality agreement in Spain." The salaries are set to go up. Ahead of the next round of collective bargaining negotiations, the unions have been talking about a pay rise of above five per cent in 2025.
2024 has been characterised by lower spending, while hotels and flights have gone up in price. "If a family has 2,000 euros for their holidays, a few years ago they spent 1,000 on the hotel and transport and had another 1,000 to spend on restaurants, excursions, shopping. Now they have to pay 1,600 for the accommodation and transport and have 400 euros left for everything else."
Ferrer recently said that turnover had fallen 30% this summer. He and Robledo both now point to a 20% drop. The association president says that restaurants are the first to notice when an economic slowdown is approaching. Consumers start tightening their belts. "The European economy is cooling down."
The restaurants are still turning in profits, but these are now between eight and twelve per cent as opposed to 20% they have enjoyed over the past couple of years. Robledo concludes: "We have to continue betting on quality, but by offering more competitive prices. That means replacing some products with others."