Iran’s state-run media have reported the persistent inflationary conditions in the country, citing them as a significant threat to various industries, including the restaurant business. According to the ILNA news agency, in recent months, 30 well-known restaurants in Shiraz alone have had their licenses revoked.
ILNA also reported that attempts by restaurants to entice customers through tactics such as reducing portion sizes and prices have failed to stem the decline in patronage. Citizens are now opting to dine out less frequently, especially on weekends, or are only committing to dining out once a month.
A member of the Union of Traditional Restaurants and Canteens of Shiraz referred to the value-added tax as a ‘double scourge,’ noting that citizens are struggling to cope with this additional tax burden. Ali Akbar Ghavipanjeh emphasized that restaurants are facing closure on a daily basis due to a multitude of issues.
According to this union official, the average cost per person in a typical Shiraz restaurant is 500,000 tomans, translating to 2 million tomans for a family of four.
The official further stated that families can not afford dining out even once, while the minimum monthly salary in Iran is currently about 5,308,000 tomans. A married individual with children, receiving all salaries and benefits, would typically earn around 9 million tomans per month.
These challenges are not confined to Shiraz but are prevalent across the country, with warnings issued months in advance. In May 2023, the owner of a prominent restaurant brand in Tehran informed the ‘Khabar Online’ website that 55% of restaurants in Tehran had involuntarily declared bankruptcy.
Nader Behavi predicted a further wave of closures due to rising costs of raw materials and rents, leading to a decrease in people’s purchasing power. He highlighted that restaurants are burdened with fixed costs such as property and insurance regardless of sales, indicating an impending surge in closures.
Meanwhile, inflation rates continue to climb, with new data from the Iranian Statistics Center revealing a staggering 93% inflation rate for red meat in February 2024, among the 10 essential food items surveyed.
The consumer price index for February indicates consistent increases in the prices of all 10 subgroups related to food and beverages over the preceding 12 months, with food inflation averaging 54.1%, 2.6% higher than the overall inflation average.
In light of these statistics, industry experts and activists anticipate a further increase in restaurant closures and bankruptcies.
