A Sharp Concept and Loyal Guests: What Allows Restaurants in Latvia to Survive?

The restaurant industry in Latvia has undergone significant changes following the pandemic and other economic upheavals. A number of restaurants have closed their doors, but some have managed to continue operating, now facing new challenges such as high food and electricity costs, as well as labour shortages. At the same time, there are also restaurants that have opened their doors in the post-pandemic period, such as “Vīna Studija Splendid.” The ability to keep operating and maintain motivation is largely helped by loyal customers—the creation of a steady base of regular guests is one of the keys to running a successful long-term restaurant in Latvia.

The Restaurant Business Has Never Been Easy or Simple

Despite the effects of the pandemic, a decrease in foreign tourists, and high food and electricity prices, Latvia, and Riga, in particular, remain good places to operate in the restaurant industry. During the pandemic, “Resto-Rātors” also had to say goodbye to several popular restaurants, but at the same time, we invested in and opened new venues for guests. Although I am also developing restaurants in London, Riga is my home, and even during the toughest times, I never considered leaving. A lot of time, effort, and investment has been put into this place. I believe this commitment is what keeps many restaurants going. And, of course, it’s also thanks to the guests who come, reserve tables, and appreciate our work. The restaurant business has never been very easy or simple, but right now, the challenges are particularly numerous—rising costs for rent, electricity, and food products are still increasing. The rise in food prices is especially noticeable in Latvia, as many products are imported, and the more complicated the supply chains become, the higher the costs. To some extent, restaurants are held hostage by the situation—we understand that our guests are also facing increased expenses for rent, utilities, and other things, so we can’t significantly raise prices. Without guests, there would be no restaurants, so we are currently striving to find a balance.

Lockdown Aftershocks: How the Restaurant Industry Continues to Feel the Impact

In addition, there is also a shortage of staff, which has led to a rapid increase in wage thresholds—rough estimates suggest that the cost of employee salaries is currently 40% higher than before the pandemic. While it’s easier to find employees in Riga than in London, lockdowns have heavily impacted sectors that rely heavily on physical labour, such as construction, restaurants, hospitality, etc. Working in the restaurant industry is not easy, but the development of technology shows that there are more and more jobs that can be done from home, often with better pay. Restaurants have to compete with this as well.

Not Just Surviving, but Opening New Places

Despite all the challenges and obstacles, there are restaurants that manage to keep going. I believe it is important to take advantage of the opportunities that have arisen after the pandemic and work on business development by adapting to the new circumstances rather than stagnating. The pandemic was a dark period for all businesses whose core operations are primarily in-person, but we saw potential in creating a restaurant with a free concept, offering something new to restaurant enthusiasts. After participating in an auction and gaining the opportunity to acquire a space, the idea for the restaurant "Vīna Studija Splendid" was born, and I am very pleased that visitors have already appreciated it.

A Clear Concept and a Strong Customer Base

Looking at the restaurant scene in Latvia and Riga, we can clearly see that some restaurants have longevity, while others frequently change owners or survive only for a season. Our restaurant group can boast several "long-lived" establishments, and I must say that the key is being able to create the right concept at the right time. The group includes restaurants featuring Slavic, Italian, and Israeli cuisine, and to some extent, it’s the clear and easily understandable concept, as well as quality, that has helped establish a base of regular guests. A strong customer base—people who want to return again and again—is one of the prerequisites for a restaurant in Latvia to survive, as new players regularly enter the market, including those without previous experience but with a desire to try their hand at it. From the outside, the restaurant industry may indeed seem like an endless celebration, and I’ve heard from many new restaurant owners that their main motivation is not profit but the desire to try something new. However, in the current circumstances and market, for many restaurants, a good outcome is simply balancing income and expenses. If at the end of the month the balance sheet shows zero, that’s already good, not to mention making a profit. If you have to invest 20 to 40 thousand euros every month, the desire to try may fade quickly.

Having worked in the restaurant industry for a long time, both in Latvia and elsewhere in the world, I’ve realized that challenges don’t scare me; they just push me to find new ideas and solutions. I am pleased that, thanks to our team and guests, we have managed to survive the pandemic and other upheavals, and we are ready not only to stay in Riga and Latvia but also to delight restaurant visitors with new and interesting concepts.