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While discussions about a crisis in Kazakhstan's restaurant industry are ongoing, Alisher Toyguliev, co-founder of brands such as Eva Coffee, Tang Ramen Bar, and Kettik Group, offers a different perspective. He views the current economic climate not as a crisis, but as a significant redistribution of the market, with more substantial challenges on the horizon for the food service sector.

New Tax Code and Financial Strain

Toyguliev points to the new Tax Code, which mandates a 3% turnover tax for restaurants, down from the previous 4%. However, the shift from quarterly to semi-annual tax payments presents a new hurdle. Many entrepreneurs, he explains, fail to adequately budget for tax liabilities, operating on a month-to-month cash flow basis.

"Many entrepreneurs, not just in the restaurant industry, don't pre-calculate their tax expenses. They live by the principle of 'there's no money now, but there will definitely be next month.' But such hopes are not always justified. For many, paying 3% of their semi-annual turnover all at once when the time comes can be a heavy burden. Therefore, those who haven't re-evaluated prices and optimized costs will face a crisis," Toyguliev stated.

Market Redistribution, Not Crisis

According to Toyguliev, those who label the current situation a crisis are primarily those experiencing difficulties. Conversely, many businesses are thriving, some even better than before. While some restaurants may close, numerous new, successful establishments are opening simultaneously, though they may not always publicize their achievements.

"Take ABR Group, for example: looking at their development strategy, their profits are also growing. If the situation for some entrepreneurs worsens, it improves for others. This is not a crisis, but a redistribution of the market," he emphasized.

Rising Competition and Shifting Consumer Habits

The entrepreneur highlighted the increasing competition. Over the past year, many new venues with strong product offerings and significant marketing budgets have emerged, attracting customer attention. Patrons who previously frequented one establishment are now exploring new options, sometimes permanently switching their loyalty. Businesses that lose their customer base quickly feel the impact on their revenue.

Impact of Ramadan on Business

Toyguliev also commented on the effect of Ramadan on the restaurant business. He noted that while some establishments might see a decrease in revenue during this period, others, particularly Kazakh restaurants, can experience increased profitability. This is largely due to the tradition of Iftar (breaking the fast) becoming a significant family and social gathering occasion.

"Ramadan cannot be called a crisis factor: if income decreases for some, it brings the best month of the year for others," he said.

Focusing on Depth Over Expansion

Reflecting on his own businesses, Toyguliev mentioned that January and February typically see a dip in revenue. However, March brought a significant improvement, with historical records being broken. This surge was attributed to warmer weather, the holidays of March 8th and Nauryz, as well as enhanced service and marketing efforts.

"This indicates that the crisis has not yet begun. But we will see what happens in August and September when the tax payment deadlines arrive," Toyguliev remarked.

He also revealed that the company has paused its expansion plans, shifting its focus towards improving service quality. Their coffee shops are experimenting with new blends and developing unique taste profiles, while the Japanese restaurant is innovating with its ramen offerings.

Author-Driven Projects Will Endure

Despite the competitive pressure from larger chains, Toyguliev believes that small, author-driven restaurants will maintain their niche in the market due to their dedicated customer base.

"There will always be a place for them in the market. There is an audience that appreciates a more intimate, personal experience. These people are not going anywhere, and author-driven projects will not disappear," he assured.

Nevertheless, Toyguliev acknowledged that some entrepreneurs might be forced to close their businesses, particularly as the deadline for paying semi-annual taxes approaches.