Signs of revival are emerging in the hospitality and catering sector after years of stagnation and contraction, with revenue significantly increasing since the beginning of the year. This positive trend is highlighted by the Datev SME Index, published by the FAZ. The index shows that, adjusted for seasonal variations, nominal revenue in the SME gastronomy sector in April was nearly 4% higher than in December, representing a 7.1% jump compared to the previous year. While the highest sales volume was recorded in autumn 2023, Datev economists view this upward movement as a promising sign.
The strong revenue growth is strongly linked to the reduction of VAT on gastronomic services from 19% to 7% in January. According to Timm Bönke, Datev’s Chief Economist, this tax cut is beneficial for small gastronomy businesses, as it significantly improves their difficult profitability situation.
However, even this positive development in the gastronomy industry is not enough to signal an overall end to SME stagnation. The Datev SME Index shows only a slight stabilization in total sales compared to this time last year, reporting a 1.2% increase. Robert Mayr, CEO of Datev-Genossenschaft, clarified that this nominal sales increase is not evidence of a broad recovery, noting that “a genuine trend reversal still lacks cross-industry momentum”. Furthermore, while employment slightly contracted in April, falling 0.2% compared to a year ago, labor costs saw a notable increase of 4.9% in April-a rate faster than the general price increase.
For its SME Index, Datev compiles data from VAT pre-declarations made by over one million companies and payroll records for more than eight million employees. This data is anonymized and aggregated to provide the index, which historically serves as the indicator of the cyclical development across German small and medium-sized enterprises.