Moscow Food Service Market Declines by 26% in 2024: Key Trends & Insights

In 2024, the number of new food service establishments in central Moscow decreased by 26% compared to the previous year, with only 200 new locations opening. The main reasons were a shortage of quality spaces, rising costs, and high interest rates. More details can be found in the market analysis by NF Group and industry experts.

Key Data:

According to the NF Group report, 104 restaurants, 44 coffee shops, 29 bars and pubs, and 11 fast-food outlets opened in the capital over the year. However, this is 69 fewer establishments than in 2023. At the same time, the share of food service businesses among tenants on central streets remained dominant at 38%, but growth in the segment is constrained by a record-low vacancy rate (7.7%) and rising business launch costs.

Main Reasons for the Decline:

1. Space Shortage. The level of available premises in Moscow has reached a five-year low. "Quality locations in the center are occupied, and new projects have to compete for limited resources," explains Irina Kozina, Head of Street Retail at NF Group.
2. Rising Costs. According to Oleg Podgorny (Shokoladnitsa Group), the costs of rent, products, and wages have increased by 15-30%. Anastasia Faizieva (CORE.XP) adds: "Businesses are facing a triple hit—inflation, staff shortages, and a decline in customer purchasing power."
3. Interest Rates. Alexander Muratov (Yakitoria) describes loans with an annual rate of 25% as "unbearable" for small and medium-sized businesses: "Many investors are postponing openings or moving into other niches."

Market Paradoxes:

Despite the decline in new openings, the number of closures in central Moscow dropped by 21% (to 140 locations). This indicates increased industry stability after crisis years. Additionally, the bar segment grew by 8% (168 establishments), with Pyatnitskaya Street leading in the concentration of drinking establishments (15 locations).

Forecast for 2025:

NF Group analysts predict that new projects will mainly emerge through the replacement of old tenants. "The market is nearing saturation, but demand for original concepts remains," notes Kozina. The primary trends will continue to be classic restaurants and coffee shops, whose openings have increased by 30% over four years.

Key Takeaways:

• Space shortages and rising costs have slowed the development of the food service industry in Moscow.
• Interest rates of 25% limit opportunities for small businesses.
• The bar segment is showing growth despite the overall decline.

Conclusion:

Moscow's restaurant market is adapting to new realities: businesses are becoming more cautious and focusing on sustainability rather than expansion. However, the shortage of locations and high competition for customers will require innovation and flexibility from market players.