Pastries over feasts: how food service has changed in Russian megacities

Feb 25, 2021

By the end of 2020, a slowdown of the food service industry was identified in major Russian cities, with the number of establishments increasing by only 8.9%, whereas the previous year saw a rise of almost one-third. Nevertheless, not all segments were negatively impacted by the 2020 coronavirus year – certain segments followed city-dwellers’ changing habits and saw significant growth. Delivery-based formats such as sushi bars and pizzerias grew faster than market rates, with bakeries finding their way into the top three. 2020 stood out for the decline of bars and stagnation of restaurants, which reacted strongly to the restrictions on the food service industry.

Our calculations

2GIS analysts researched 15 major Russian cities, each with a population of over one million. These results allowed them to calculate the changes in the number of foodservice establishments between January 2020 and January 2021, covering a broad range of formats, from restaurants to fast food. 2GIS and businesses regularly update their data on the food service industry, as well as other sectors, which show changes in the number of organizations.       

Growth rates by format

In 2020, the number of food service establishments in Russian cities with over a million inhabitants rose by 8.9% and surpassed 65,000 locations. The number of establishments increased in all major cities nationwide without exception, however, the food service market growth rate saw a threefold decrease. In 2019, the number of establishments of all formats increased by 31.6% in total.

2GIS data reflect the general trend in the industry over the past year and take into account the number of establishments at the beginning and end of 2020. It should be noted that, in the cities evaluated, there were openings and closings of establishments, and a portion of the remaining businesses successfully adapted to the new situational work conditions, introducing delivery and changing their positioning and work format. On top of the quantitative changes of the market, the study also addresses format redistribution on the food service market in major cities. 

Three food service segments showed the best momentum in 2020 with regard to opening new establishments: sushi bars (+35%), bakeries (+30.5%), and pizzerias (+22.2%). The sushi bar is not necessarily a popular trend in all cities nationwide – in some places its peak has passed, in some it is seeing a resurgence of interest. Selling fresh pastries and often adopting a cafeteria format, bakeries became the breakout discovery of 2020, rapidly multiplying in all major cities. Pizzerias saw stable growth for the second year in a row, adding over 20%.     

It should be noted that two of the three leading formats – sushi bars and pizzerias – focus on delivering prepared food. Delivery is yet another 2020 trend – the number of establishments in major cities prepared to deliver orders to customers increased by 123%. 2GIS and Delivery Club highlighted this trend recently.

Fast food joints and cafés, the most widespread formats, decelerated. In 2020, the number of these establishments increased by merely 8.43% and 3.07%, respectively, which can be compared to 2019 when the number of fast food restaurants virtually doubled in size in 2019, with cafés increasing by 10%.

Restaurants (+1.99%), cafeterias (1.36%), and bars formed a trio of outsiders, with bar-format establishments having a particularly difficult year, decreasing in number by 1.19% in 2020. 

Traditionally, restaurants remain one of the most conservative food service formats, rarely performing strongly. In 2020, however, restaurants also encountered a drop in effective demand. In half of the cities assessed, including Moscow, the number of restaurants declined for the first time in several years.    

The evolution of the cafeteria segment may have been slowed down by the mass shift toward remote work introduced in cities. A year earlier, the growth rate of establishment openings exceeded 18%. 

Bars were the only format to experience an overall decline in all major cities, which can be attributed to the introduction of rigorous restrictions in spring 2020, changing how establishments work. In the majority of cities, bars were limited to take-out and not allowed to serve sitting customers, with their night-time opening hours also capped.