Structural transformation of the restaurant business in Lviv region in 2015–2024

Abstract

Abstract. The article provides a comprehensive analysis of the structural transformation of the restaurant business in Lviv region over the period 2015–2024, based on data from the State Statistics Service of Ukraine for the economic activity “56.10 Restaurant activities and mobile food service activities.” The study examines the dynamics of the number of active business entities and individual entrepreneurs, employment levels, personnel costs and social contributions, production and sales volumes, value added at factor cost, and labour productivity. It was found that in the pre-war period (2015–2019), the restaurant industry in the region experienced rapid growth across all key indicators: the number of entities increased by 47.8%, employment by 76.6%, and the volume of products sold tripled. The COVID-19 pandemic and the full-scale invasion of 2022 had an asymmetric impact on different organisational forms: sales volumes of individual entrepreneurs decreased by 96.2% compared to the peak year of 2021, while business entities experienced a 77.3% decline. The study reveals the formation of a two-tier market structure, where business entities generate over 83% of the total sales volume while comprising only 52% of the total number of entities. Labour productivity in business entities was 2.3 times higher than that of individual entrepreneurs. The recovery observed in 2023–2024 is predominantly quantitative in nature: the number of entities approached the 2017 level, yet sales volumes remain considerably below pre-war figures, indicating an insufficient quality of recovery and a decline in average turnover per establishment. It is concluded that the further development of the industry will depend on the security situation, household income dynamics, and the intensity of the recovery of tourist flows to Lviv region.