Runaway inflation, rising food prices, and falling purchasing power push thousands of Iranian restaurants toward closure as economic despair deepens.
The sharp and relentless rise in inflation, soaring food prices, and the steady erosion of purchasing power have pushed Iran’s restaurant industry to the edge of collapse. Across the country, restaurant owners are warning that their businesses can no longer sustain operations under current economic pressures. For many, keeping the doors open is no longer profitable, and hundreds of establishments are now on the verge of permanent closure.
Data show that while overall dining out has sharply declined, takeaway orders increased by about 25 percent during the first half of 2025 compared to the same period last year. This shift in consumer behavior reflects a fundamental reality: as living costs surge, many Iranians now opt for cheaper ready-made meals rather than dining in restaurants—once a hallmark of the urban middle class.
The effect of inflation on restaurant pricing is stark. In Tehran, the average price of a pepperoni pizza jumped from 345,000 to 375,000 tomans in just three weeks—a nearly 9 percent increase. The price of a single skewer of kebab in central Tehran ranges between 180,000 and 220,000 tomans, up 10 to 12 percent from only two months ago. Traditional dishes such as chicken kebab with rice, which cost 240,000 tomans in early spring, now exceed 300,000 tomans in most restaurants.
Despite the soaring prices, restaurant owners report that their profit margins have fallen by as much as 10 percent this year. Many have resorted to cutting portion sizes—reducing rice servings from 350 to 280 grams—to offset skyrocketing ingredient costs. According to official data, food prices in Iran have increased more than thirtyfold over the past decade, with staples like rice, meat, and legumes leading the surge.
In addition to food costs, rent, utilities, and wages have all multiplied several times over the same period. To survive, many restaurant owners have introduced “economic menus”—a downgraded version of their regular offerings, designed to attract price-sensitive customers but reflecting a sharp decline in food quality and standards.
While these “budget menus” appear to cater to lower-income consumers, they also symbolize Iran’s deepening class divide. In many restaurants, menus are now divided into three sections: “special,” “regular,” and “economic.” For example, a portion of kebab with rice costs over 500,000 tomans in the special menu, between 300,000 and 350,000 in the regular one, and 150,000 to 200,000 in the economic version. Even after accounting for cheaper ingredients and reduced quantities, experts say the price gap reflects widespread market disarray and weak government oversight.
The quality crisis accompanying this trend poses serious health risks. Restaurant unions and food safety advocates warn that the use of low-grade or illegal additives has become common in cheaper meals. In May, Hossein Mohammadi, head of Tehran’s Traditional Food Union, cautioned that the so-called “cheap food trend” has effectively turned into “poison sales.” He warned that the use of substandard ingredients and synthetic flavorings—such as counterfeit saffron extract—could lead to serious illnesses, including cancer.
At the same time, a new pricing phenomenon has emerged in the industry: “half-portions.” Originally designed to help low-income customers, these half-sized meals have now become an emblem of widespread poverty. In some restaurants, even half-portions are split into “regular” and “economic” categories—an unsettling reflection of the growing inequality and social stratification across Iranian society.
The restaurant sector’s decline began during the COVID-19 pandemic but has intensified under worsening economic conditions. In 2023, Nader Raftari, owner of a major restaurant chain, revealed that 55 percent of restaurants in Tehran faced closure due to collapsing demand. Even in the capital’s affluent northern districts, daily sales have dropped to less than half of pre-pandemic levels. In Mashhad alone, over 250 restaurants shut down in 2023, while in Shiraz, union representatives confirmed that sales in many eateries have fallen below 50 percent, forcing owners to abandon their business licenses or switch trades altogether.
These figures paint a grim picture: a once-profitable and vibrant service industry is now crumbling under the weight of inflation, mismanagement, and declining consumer confidence.
Meanwhile, in a striking contrast, a new wave of luxury dining has emerged in northern Tehran and other wealthy enclaves. Some high-end restaurants now list prices in U.S. dollars, with entrance fees exceeding the full price of a meal in ordinary establishments. The price of a single kebab in these venues can be one million tomans more than in a mid-range restaurant elsewhere in the city.
This duality—extravagant luxury on one side and widespread economic despair on the other—has turned Iran’s restaurant sector into a mirror of the regime’s broader economic inequality. While a small elite flaunts its wealth in lavish dining halls, millions of Iranians struggle to afford even the most basic meals. The rise of cheap, low-quality food and the decline of public health are not merely culinary trends—they are symptoms of a collapsing economy under a corrupt and mismanaged system.
