By Elias Papageorgiadis
A middle Greek provincial city with large incomes from tourism and agriculture had in practice 5 large cafes and dozens smaller. Of the big ones:
- One closed two years ago, probably mismanagement.
- The second one was sold a while ago, and now it's going to close.
- The third "closed for summer" (!)
- The fourth stands upright, but does not have an easy way ahead.
- The fifth has a more auspicious future, without rent costs.
In the rest the changes are constant...
The coffee industry (and food) seems to be going through a lot of "turtoon" and will probably need a new business model. At the same time of all sorts, "smellings" have not understood what is happening and continue to open shops that usually close quickly. After all, the chance of success is now 1%..
I've presented all this to you for years. But now we're entering the next stage of drama. Why?
The lack of business culture of Greeks in its most obvious form
After 1981 (when an entire people were convinced that "there is money without work" and "a trick left unpunished") gradually the majority of Greeks forgot what business means. From the bankruptcy of 2010 onwards, the more difficult life became, the more coffee became the subject of a business effort by thousands of people, since in their cloudy mind they combined:
- "Low investment cost".
- "Easy job"https://www.capital.gr/"I've worked at coffee, not least hard, the owner sits all day, when he steps on the shop".
- "Brown makes 10 – 20 minutes and sells it 2 – 3 Euro = big profit margins".
- "Everyone drinks a coffee = large target group audience".
- "He's got his luck, since you're boss."
Especially after the coronavirus the new global trend that appeared in social media involved "obligation Someone not just earn a lot of money, but also do it. without working"or else it's not hot. Many strays chose this road to achieve it...
For some the cafés became "the solution to having a job and making a living, instead of working for 800 euros in the business of another," while many were also the parents who funded these projects, "to be close to their children and not to leave" (Since in Greece the majority prefers to be destroyed financially Here., rather than get off the hook and hit out.).
Finally, there were also the few serious ones who set up coffee by paying everything cash, without using loans ( = increased operating costs) and with a business plan. Not all of them made it, but they had a more success rate over time.
The work of the partners "who do it with little jumps"
Coffee over time was an object of work in our country that at first brought together many different persons, who considered it easy to work together to create a new business (in a country that has no culture of cooperation).
What happens in practice in 99% of these cases I have explained in detail perhaps in the first viral article I wrote in Greek. "Golden Rule on how coffee is opened and closed in Greece".
A business model set up in non-payment of taxes
In the area of coffee, therefore, they were crowded with "relevant" and (mainly) "unrelated" to the business. At some point the various franchises, which were supposed to fill the gap of business education and provide solutions, appeared. Unfortunately, most simply "proposed agreements beneficial to the franchiser and not to the franchisee" (I write it as elegantly as I can).
Thus, for many years, cafes (and food shops, restaurants etc) in Greece have been led to a specific, distorted business model:
- Rent an expensive shop or a cheap one, rarely something intermediate.
- Offer of similar / same products.
- "Diversification" only in the minds of their owners, who believe (and believe) that they "make terrible coffee".
- Of course, almost no one was concerned with understanding the target client and adapting it to the needs of this category of people.
- Exact operating costs, especially when everything is not paid cash.
- Poor paid employees who have rarely been trained and unfortunately often tolerate the nerves and the "psychic readiness" of "boss."
- Almost zero advertising and promotion budget. In recent years we have seen many shops do tragically ridiculous marketingFortunately, there are also the few exceptions.
And when all the above did not result in good results, what was the easy solution?
- The "improvement" of the payment of insurance contributions.
- "software that erase orders".
- And generally all kinds of tax/receiving.
Serious people explained to you that "the store has a profit of 3,000 a month" and if you asked details, you learned that this profit resulted from the non-payment of contributions and VAT, for example, of EUR 5,000.
Costs multiplied / taxes remained high
The years passed and by 2020 "bucks wrong" several were the ones who survived the site. Then came the coronavirus and many businesses failed never go back to the situation that was before the lockdowns...
At the same time the costs were not just launched, literally multiplied!
- Rent's up.
- Operating costs have grown too much.
- Coffee was very expensive.
- The European Union has decided that it is the right time to "save the environment" with all sorts of unnecessary obligations, which literally increased the cost of packaging materials up to 5 times (meaning that the environment is not saved with paper straws and other such jokes).
- The cost of energy has also increased very much, since its distorted pricing model in Greece has not changed, while in the European Union we continue the destructive policy of pollution rights and the closure of lignite plants etc.
- Of course, wages increased (and well done), since they were very low.
- In 2023 I had explained that the wages of the worthy and able officials would rise significantly by 2027.. Today anyone who has business and capable executives knows that this has been done.
At the same time the Greek state maintained the heavy taxation of the industry...
Buying power falls / tourism is no longer enough
In practice, in Greece we do not want / remove factories and thousands of jobs outside tourism and real estate.
Remember the last time you heard about a new factory/business with 1,000 – 2,000 jobs in our country? Almost every new investment is treated as "teaching" and "lamoya", while if it belongs to a stranger, then the crying and the moaning begins for "the profits that will go out".
We pretend that foreign investments in tourism and real estate are sufficient, and we need hundreds of investments in production economy, to hire people, to train them, to pay them properly and to increase wages, since they only increase: When many employers try to attract a worker to work.
So since investments are not made in the country and wages remain low
The people's purchasing power remains low.
After all, the costs were not only for business, but also for every household in Greece (and Europe), which has often been around the same income over the last 5 years, while the cost of living has increased greatly.
Tourism has helped for several years, but already In 2024 I have explained to you that the model changes and gradually passes the tourist revenues from the hands of many to much less, while simultaneously the number of professionals involved in the industry may have doubled over the last 8 years.
So while the costs went up a lot, the purchasing power weakened...
The catalyst of the digital work card
On 31.12.2024 I explained that 2025 would be a very different year for small and medium-sized enterprises, with the first and most important change being the implementation of the digital work card. This right measure came to reveal many "unseen secrets" of the Greek economy, but also to bankruptcy in practice a business model based on income avoidance and the endless hours of employees.
It is not only public income from contributions for overtime that increased by 500 – 600%, it was the trigger for an entire industry to realize that it should now think carefully:
- How many hours and what days does a business have to stay open?
- What will be the schedule of each employee (which should work certain hours, not "as long as necessary").
- What are the necessary revenues that will support increased costs due to non-tax evasion?
- What costs should be reduced to get the business out?
Combined with the spread of credit card usage, the digital work card led to abrupt "whiteness" of the industry and revealed too many who had set up jobs literally "with clay feet."
- "Elia, if you want to have a big impact, you should speak against these measures. They destroyed the professionals, they hunt them down, they criticize the government, they tell me at times known and friends when we discuss the matter.
I apologize, but when I think something is wrong, I point it out (and one side gets angry with me), while when I think something is right, I point it out (and the others get angry with me).
I do not want in Greece an operation which practically works 'at the expense of workers', nor does the solution be to allow any undertaking, serious and not, to live at the expense of the rest of the population.We've had enough of "social sensitivity" all these years, allowing people to leave everyone unpaid and disappear / treat people in need of work etc.
HS. A lot of people blame the new strict alcott policies, which if you've had a little alcohol, you can lose your license. "It's because of the fall of the turnover etc.
Better fallen turnover and saving a few thousand lives every year.I say.
Rain comes from a padlock...
In 2025 he came out "bucks wrong" for most of the industry, who tried to adapt to changes and new, increased costs, seeking solutions and testing various methods.
In 2026 it did not start well and the market says that in the major cities coffee and focus saw their turnovers retreat in the first half of the year and especially after Easter. However, costs continue to run, while this year the tourist year does not seem to offer the same income to tourism professionals.
So on the street it is very intensely discussed that everyone who "does not make it" with the digital card and all the other reasons that push the industry will gradually start to "stay out of fuel". Business does not rely simply on consuming the ready money (if any), nor leaving unpaid anyone you think you can replace. All this just temporarily postpones the fate that comes...
After the summer follows a difficult Autumn (with or without elections), with reduced turnover and many expenses. Then the celebrations will come and the new year, which will again have many difficulties in its first two months. My assessment is that in the semester from September to March 2027 we will see too many coffee shops (and some food shops), in my opinion 1 out of 10 open today, at least.
Their work model has been bankrupted and most people in the area are beginning to understand...
Few will make money, many will blink...
- "So no one in the industry will make any money?" you might think. They'll make three business categories:
- Small ones with low costs, excellent products / operate on a closed market, with "watchful" operating hours, that will manage to be Very Successful (no longer enough to go well).
- Very well organized jobs, with controlled operating costs, loyal audiences and large It's a joke.
- Those for which they are supposed to use "fronts" etc. and operate "pirated", accumulating debts and changing data every 1 to 2 years.
For everyone else, I think they'll just open up or grow up, burning money and increasing their unpaid obligations.
In Greece the coffee industry will have major losses in the next period. When the consumer doesn't come out because of low purchasing power and "the business doesn't come out" because of increased costs, guess who closes...
I personally find it good to free thousands of people from jobs that do not give them serious profits and to look for how they will succeed really στη ζωή τους. Καμιά φορά αλλάζουμε και βελτιωνόμαστε μόνο μέσα από τη δυσκολία (στο λέω εκ πείρας) και ο κλάδος αυτός έχει μπροστά του πολλές δυσκολίες, πριν οδηγηθεί στο μεγάλο ξεκαθάρισμα, στην πρώτη διεθνή οικονομική κρίση…
Εσύ τι γνώμη έχεις;
*Ο Ηλίας Π. Παπαγεωργιάδης διοικεί τον όμιλο εταιρειών MORE (εμπόριο, συμβουλευτική, λογιστική εταιρεία, ακίνητα), είναι μέλος της Taurus Development που αναπτύσσει οικιστικά έργα στα Βόρεια Προάστια της Αθήνας, είναι αναλυτής και σύμβουλος.
Κυκλοφορεί το νέο βιβλίο που έγραψαν ο Στράτος Παραδιάς και ο Ηλίας Παπαγεωργιάδης με τίτλο “Αγοράζω Σπίτι”, όπου απλά και ξεκάθαρα εξηγούν τα πάντα για την αγορά, διαχείριση, ενοικίαση και πώληση ενός ακινήτου στην Ελλάδα σήμερα. Το βιβλίο προλόγισε ο Διοικητής της Τράπεζας της Ελλάδος Γιάννης Στουρνάρας.
Επίσης κυκλοφορεί το βιβλίο “Το Πρώτο Βήμα” του Ηλία Παπαγεωργιάδη, με 100+ χρηστικές συμβουλές και δεκάδες πρακτικές λύσεις για τους μικρομεσαίους στο Ελληνικό επιχειρείν.
