Just three years ago, the restaurant industry in Pakistan was caught in the vicious circle of pandemic-related challenges such as employee shortages, financial losses, and adapting to change. It had barely recovered the losses incurred that the current economic situation compounded by the soaring power tariffs sprung fresh challenges and hardships for it.
“It is disheartening that the industry, which has long been a source of joy and entertainment is navigating through its most trying period yet,” says Kamran Sheikh, architect, interior designer, and Chairman of All Pakistan Restaurant Association. “The explosion of restaurants is a testament to the evolving tastes and preferences of the population, but it has brought with it the burden of excessive taxes, licensing fees, and additional charges. These financial pressures, combined with the limited dinner hours, threaten to extinguish the vibrancy of this vital sector.”
Sheikh elaborates that restaurants are not just places to dine; they are hubs of social interaction, cultural exchange, and community bonding. In a landscape where alternative forms of entertainment are limited; the significance of restaurants cannot be overstated. “They are more than mere businesses,” he says. “They are the lifeblood of countless families, communities, and the second-largest employer of people in the country. The dire situation facing the restaurant industry calls for urgent attention and relief from local governments. The survival of this crucial sector is not just about economic viability; it’s about preserving an integral part of Pakistani culture and society. I hope that policymakers recognise the pivotal role that restaurants play and take measures to alleviate the burden of taxes and fees in the present climate.”
Less eating out
Farooq Mamsa who has served well-known multinational brands in the food industry for the past 28 years, worked his way up to the top and presently is the COO of OPTP, one of Pakistan's largest and most rapidly growing fast-food brands. He believes that in the present economic climate, people’s eating habits may not have changed completely, but they've been amended to a certain extent.
“Going out is one of the few things a family can do in Pakistan, so they still go out as this is how we celebrate occasions,” he points out. “But they tend to now think a lot more about where they want to go, and how much they want to spend. People who enjoy going out to high-end places maybe once a week, may now be going once in two weeks or probably order in from casual dining or fast-food places like KFC, OPTP or McDonald's or maybe Nando's which is cheaper to a certain extent compared to high-end outlets, So, while people have not actually changed their habit of eating out, since a segment doesn't eat at home, the overall spending may have somewhat decreased. Previously, they may not have thought as much about the budget for spending or eating out, but now it certainly figures in."
Drop in sales
“Sales have dropped,” says Mamsa in regard to the current economy and inflation. “Year on year we've seen that September sales are lower than August, but this year the drop has been a lot more significant,” he says. “Some restaurants or chains have actually seen a drop of up to 40% in sales which is quite significant.”
Money devalued
“Students who've seen the value of the money in their hands shrink have also changed the way they spend that money. They may be eating more fast food or from a certain local chains or homegrown outlets where they get a lot more value for their money.”
Higher cost, lower profits
The rising cost of doing business undoubtedly puts pressure on menu prices, which has significant implications for the affordability of dining out, especially for the average consumer. “In an environment where the cost of doing business has soared, it's an unfortunate reality that these increased expenses may inevitably find their way into menu prices,” Sheikh points out. “While this might not greatly affect the well-off, it does pose a concerning dilemma for the average person who may find dining out less accessible due to budget constraints.”
Whether it's fast food or casual dining, the ripple effects of rising prices can potentially limit the ability of many individuals and families to enjoy the simple pleasure of a meal outside their homes. It's a situation that underscores the importance of finding a balance between ensuring a sustainable restaurant industry and making dining out accessible to a wider segment of society.
“The cost of raw ingredients and transportation have gone up, salaries and wages as well, although not to the same extent, but to a certain degree,” agrees Mamsa. “With business costs increase significantly, it's not possible to make the same profits that restaurants made earlier. As the profits have shrunk, those who could not sustain themselves have gone out of business. Someone from a major food delivery service told me that they lost around 5,500 food outlets in a few months that are either shutting down completely or just stopped doing business with them because they just could not afford the commissions anymore, and that is hugely significant.”
A slippery slope
While quality is a big question mark to most people, intelligent businesses have raised the quality bar and they offer a lot more value for money in that sense. “Which is why the sales at these, while affected, are to a lesser degree than others,” shares Mamsa. “The worst thing that a business can do is shrink their portions and quantities or replace ingredients with lower quality ones. That is a slippery slope and customers are savvy to that and it affects them negatively causing a downward spiral in sales for those who choose that path.”
Creative solutions, such as offering affordable menu options, special promotions, or exploring innovative cost-saving measures may help mitigate the impact on consumers while allowing restaurants to stay afloat. “It's a challenging landscape that requires both resilience and adaptability from the industry as well as understanding and support from the public and policymakers,” says Sheikh, who believes that the goal is to preserve the cultural and social significance of dining out, making it an experience that remains within reach for as many people as possible, regardless of their economic circumstances.
From hot to haute
Sheikh ventured to Pakistan in the early 80s to craft an extraordinary career. "My professional journey began in this vibrant country,” he fondly reflects on how he started out. “My inaugural project, Ménage Restaurant, marked a significant milestone as the first fine dining establishment to grace the dining-out scene in years.”
Stay for the ambience
Since his foray into the restaurant business, Sheikh’s journey has been a tapestry of diverse accomplishments. Not only did he introduce a new era of dining, but also pioneered the field of interior design in Pakistan. “I’ve conceptualised and executed numerous restaurant projects, overseeing every facet of the hospitality industry,” he shares, “from crafting innovative kitchen designs to curating menus that tantalise the taste buds, and from creating inviting interior spaces to providing comprehensive training.
New flavours
Sheikh’s dedication to the art of hospitality continues to drive him forward. “Throughout my extensive experience in Pakistan’s culinary landscape, I’ve had the privilege of introducing exciting new flavours to the scene,” he shares. “I brought the allure of American continental and the exotic charm of Thai cuisine to an audience eager for something fresh and exciting.”
In those early days, culinary options were limited, with only a handful of restaurants catering to diverse tastes. “While Cantonese cuisine held its sway, there was a conspicuous absence of fine dining establishments,” says Sheikh, discussing the void that presented an opportunity to redefine the culinary experience in Pakistan. “Introducing new cuisines cuisine, not only expanded the gastronomic horizons but also established the concept of fine dining.”
Sheikh’s commitment to elevating the dining experience have been the driving forces throughout his career. “I’ve been privileged to witness and contribute to the evolution of Pakistan’s culinary landscape, and my journey continues to be one of creativity, excellence, and a dedication to delighting palates.”
In the early stages of Sheikh’s culinary adventure, the concept of fine dining was met with awe and wonder in Pakistan. “It was a time when people were accustomed to more casual and unassuming dining experiences,” he explains. “The introduction of American continental and Thai cuisine was a revelation in itself, but it was the fine dining interiors that truly captivated hearts and minds.”
Power of aesthetics and ambiance
The crisp, clean, and meticulously designed dining spaces Sheikh created were a departure from the norm. Guests were treated to not only exquisite flavours but also to an ambiance that transported them to a world of elegance and sophistication. “It was an intrepid exit from the usual and a bold step towards redefining the dining culture,” he says.
“As the years passed, fine dining became increasingly popular, and I took pride in being at the forefront of this culinary transformation,” shares Sheikh.
Café Zouk
In 1994, Café Zouk emerged as a trailblazing icon in the Pakistani culinary landscape. Over nearly three decades, it has stood as a beacon of excellence in the realm of casual continental and Thai cuisine, consistently delivering memorable dining experiences.
“From the early days when American continental and Thai cuisine were groundbreaking to the present, Pakistani tastes have expanded to include Mediterranean, Italian, Japanese, and even Korean delights, and it’s heartening to witness the rich medley of flavours now available to Pakistani diners,” says Sheikh. “The proliferation of fine dining, casual, and fast-food restaurants across Pakistan is a testament to the growing appetite for diverse culinary experiences."
Sheikh believes it is the need of the hour to explore, reinvent, and elevate the flavours and traditions of our rich culinary heritage. “As the culinary landscape continues to evolve, there’s potential for exciting fusion and reinterpretations that pay homage to our roots while embracing global influences,” he says.
The hard truth
A lot of restaurants shut down soon after they launch, as opposed to those that have been around for decades. What goes wrong? “Running and maintaining a successful restaurant necessitates not just passion, but a professional work ethic of the highest order,” says Sheikh. “While new establishments sprouting up everywhere, it’s important to recognise that the restaurant industry has evolved into a finely-tuned science. Beyond the allure of vibrant crowds and social gatherings, the foundation of a truly successful restaurant lies in the rigor of training and professionalism. Owning a restaurant can appear glamorous, and the idea of being a restaurateur is seductive, however, the reality behind the scenes is hard work, discipline, and unwavering commitment.”
“I've enjoyed every bit, every minute of my time within this industry because it's a passion,” says Mamsa, recounting his career in the food industry. “I've learned that this is a business where you keep learning. You never stop learning because every cuisine, every aspect, every restaurant, every brand is different, and while the basics don't change, the way of doing things does, and the world is changing, the eating habits are becoming different, and because eating out will always remain in, this is a fantastic business to be in as long as you do things correctly.”
Sheikh emphasises that from meticulous kitchen operations to the intricacies of menu planning and cost management, to the art of delivering impeccable service, every aspect of restaurant operation demands expertise and precision. The ability to navigate through challenges, from changing culinary trends to customer expectations, requires a deep understanding of the industry’s minutiae.
“In this competitive landscape, those who thrive are the ones who have honed their skills, embraced continuous learning, and upheld the highest standards of professionalism,” he says. “The restaurant business is a symphony of talent and dedication, where the true magic happens, creating memorable dining experiences and I cannot emphasise enough on respecting and recognising the professionalism that underpins the industry’s success, serving as a valuable reminder for aspiring restaurateurs and those who savour the fruits of their labour.”