MDB DigitalPalma de Mallorca20/02/2025 09:44
TW
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Mallorca’s restaurants are facing a challenging situation as rising costs are driving away local customers. "We are losing local clientele because high costs are forcing us to raise prices," admits Juanmi Ferrer, president of the CAEB Restaurants Association. He expresses his disappointment, noting that "no restaurateur likes to increase prices" or reduce services to their neighbours.

Ferrer explains that the escalating costs of raw materials have left businesses with no option but to adjust menu prices to keep their accounts balanced. "We’ve had to raise our prices to stay afloat," he says, highlighting that consumers understand the situation, as they experience rising costs daily when shopping. Besides the inherent expenses of being on an island, "relentless inflation, instead of stabilising, continues to drive up operational costs."

According to Ferrer, the inflationary pressure affects not only raw materials but also energy, taxes, fixed expenses, transfers, and rents. Additionally, he emphasises that the rise in the Consumer Price Index (CPI) impacts staff wages. Restaurateurs are striving to ensure their employees do not lose purchasing power amid the increasing cost of living. "This cocktail of factors influences final prices, leaving us no choice but to increase prices to balance our books."

Ferrer reiterates that this measure is not taken lightly. "Restaurateurs can make a profit with lower prices because we apply a margin to cover the overwhelming costs we face, just like any other business," he explains. "When our costs rise, we adjust our prices to maintain the necessary margin for operational and financial stability."

He believes that the situation will only improve when inflation can be controlled over four quarters without significant increases, or if the economy enters a phase of deflation.

The restaurateurs are acutely aware that many customers, particularly families, find it difficult to afford meals costing around 40-50 euros per person. As a result, many have had to reduce dining out or seek alternatives. This shift has led to a growing number of dining establishments on the outskirts of Palma and the rest of the island, which offer competitive prices compared to tourist areas. These establishments, often of very good quality, benefit from lower rents and public space occupancy fees, allowing them to provide more affordable dining experiences.