It is safe to say that, in recent years, political relations between the governments of the United States and Pakistan have been characterised by mutual feelings of mistrust, fuelled by numerous incendiary statements and high-tension incidents. Despite this, however, it appears that hungry diners in both countries have put aside whatever differences and doubts the politicians may have and have instead forged a bilateral approach to consuming American-style burgers and chicken. Indeed, Pakistani consumers have crowned US branded fast food king in major cities from Karachi to Lahore.
In a recent report on dawn.com, Samiullah Mohabbat, who recently brought the US franchise Fatburger to Karachi, said that when it comes to fast food, “American is best,” adding that his US$5.50 burger is the “perfect antidote” to the country’s troubles. “Food is the only entertainment in Pakistan,” he said. “People are certainly frightened because of the law and order situation, so they don’t go anywhere except food outlets”.
Indeed, between 2008 and 2013, while annual disposable incomes in Pakistan increased by 23.1% (in real terms) and consumer expenditure increased by 24.5%, the retail value of the fast food sector was estimated to grow by a robust 23.5%, driven by the retail value of chained fast food which grew by 112%.
Limited in past years by visits from affluent consumers, US-branded fast food restaurants are now enjoying significant growth as a result of the changing dining habits of the growing middle-class. According to a recent article in the Express Tribune newspaper, the “Pakistani middle class has welcomed the [fast food] cuisine due to variety of bargain deals, products, atmosphere, attitude and strict hygiene standards, not to mention more disposable income”. Lower-income consumers are also being attracted to fast food outlets as more brands begin to offer affordable bargain meal deals.
The Ramadan experience has also been influenced by the considerable and growing demand for fast food. Blogger Khurram Zia Khan recently posted in the Express Tribune “Eating habits and priorities are changing…A few years ago, the concept of going out for Iftar [the meal following a day of fasting] was not nearly as popular as it has become now; as a matter of fact, the mind set earlier was that people should stay at home for Iftar and go out after for something light – if required. Similarly, traditional foods that used to dominate our [Ramadan] evenings have now been substituted by non-traditional cuisine even if it costs a fortune”.
As a matter of fact, in many households a new tradition has taken hold during preparation for the holy month: families eagerly awaiting the announcements detailing the numerous fast food meal deals that will be available during Ramadan. And consumers are never short of cleverly named options, ranging from Dunkin’ Donuts ‘Feast and Fast’ deal to McDonalds ‘Dine Divine’ and ‘Blessings to Share’ deals to Burger Kings’ ‘Royal Ramadan’ deal, among numerous others.
If foodservice companies’ expansion plans can be relied upon as a barometer, it is clear that consumer demand for US-style fast food is not expected to abate. A recent report from Bloomberg News noted that fast food chicken chain KFC plans to open an additional 40 stores in Pakistan over the next five years, expanding its current network of 64 outlets in 18 cities. Rafi Rangoonwala, CEO of Cupola, which holds the franchise rights for KFC in in the country, told Bloomberg “Western brands have only just scratched the surface in Pakistan”. At the same time, McDonalds has announced plans to grow over the next few years by expanding into second- and third-tier cities such as Gujrat, Sahiwal, Jehlam, Sukkur and Khairpur, meeting the fast food needs of a whole new group of increasingly affluent consumers.
While the fast-paced expansion of the Pakistani middle-class will no doubt continue to drive significant demand for fast food in coming years, perhaps the greater factor will be the purchasing power wielded by the growing number of young consumers. Indeed, by 2016 it is projected that nearly 40% of the population will be between 20 and 44 years-old. Internet-savvy, communicating through social networks and more aware of international trends and fashions, a significant proportion of these sophisticated younger consumers will be far more willing than older consumers to connect with their global counterparts and experience global brands.
Further analysis has been drawn together by Euromonitor International’s Consumer Lifestyles analysts. To read the full report click here.