Europe’s restaurant industry continues to face financial struggles five years after the pandemic. Fewer customers are dining out, and those who do often prefer eating alone or ordering delivery. Recovery isn’t driven by larger groups or higher prices but by tighter budgets, delivery services, and creative dining experiences.
Tax cuts and thin margins
Germany reduced its value-added tax on restaurant meals from 19% to 7% in January. The change came after years of lobbying by Guido Zöllick, president of the country’s hotel and restaurant federation DEHOGA. The tax cut arrived as the industry’s revenue dropped 5.1% in real terms the previous year.
Zöllick had previously warned that operators were reaching their breaking point. The lower tax rate allowed many to avoid further price increases.
Conditions vary across Europe. In France, restaurant visits remained 9% below 2019 levels by mid-2023, according to Circana data. Italy and Spain performed slightly better, each down 4%. Solo diners now make up 15.6% of full-service visits, up from 9.4% in 2016. Jochen Pinsker, who analyzes European foodservice trends for Circana, described the change as a fundamental shift.
Marie Audren, director-general of HOTREC, Europe’s hospitality association, addressed these challenges at the group’s April assembly. She noted that energy costs and geopolitical instability continue to pressure small businesses. The association forecasts Germany will see a 1.6% increase in visits this year, while Spain lags at 0.2%. Despite the tax reduction, Zöllick expects German restaurants to post losses for the sixth consecutive year.
Delivery, dark kitchens, and dining as spectacle
Some chains are focusing on expansion and unique experiences. Victor Lugger and Tigrane Seydoux transformed their Paris trattoria into Big Mamma, a 35-restaurant group operating in nine countries. The brand’s distinctive red lighting, fresh pasta, and long queues helped boost revenue by 27% last year. Private-equity firm McWin acquired a majority stake, and Seydoux relocated to Florida in 2026 to launch the company’s first U.S. location.
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Others are prioritizing immersive dining. Ephemera Group, founded by graduates of Lyon’s Institut Lyfe, opened its seventh projection-mapped restaurant, Under The Sea, in Montpellier in February. The venue received 10,000 bookings within three days. Meanwhile, delivery services are reshaping the industry. Wolt, owned by DoorDash, sold €1 billion in groceries last year alongside restaurant orders. The service recently withdrew from Japan and Uzbekistan, while Deliveroo exited Qatar and Singapore.
The growth of dark kitchens—spaces that prepare food solely for delivery—has divided the sector. Anton Soulier closed Taster’s physical kitchens and converted the French company into a licensing operation. Its brands are now produced by other operators in over 400 online restaurants across 80 European cities. Clément Benoit’s Not So Dark followed a similar path in 2021, raising €83 million to let restaurateurs run its delivery-only concepts. The dark-kitchen market is expected to expand from $7.4 billion in 2026 to $25 billion by 2033, with Germany and Britain leading the way.
Mirko Silz is expanding L’Osteria into markets once served by Vapiano, which closed in 2020. The Italian-food chain opened its 200th location in Hamburg in February and plans to invest €60 million to enter France, Poland, and Spain. Silz stated the move could generate up to 10,000 new jobs. Smaller businesses are also adjusting, redesigning spaces to accommodate solo diners who now occupy one in six full-service seats.
Despite these efforts, the industry’s recovery remains slow. Visits across Europe’s largest markets have yet to return to pre-pandemic levels. Big Mamma’s Florida debut later this year may draw attention, but it won’t offset the impact of cautious spending and rising expenses. The sector’s survival may depend less on bold strategies and more on basic financial stability.
Cities struggling with congestion have found relief in new infrastructure projects. A recent bridge eases flooded city commutes, offering an alternative for residents in areas prone to seasonal disruptions.