RIYADH: Food consumption in Saudi Arabia will grow by 7.3 per cent in 2016, outperforming other regional markets, according to recent industry reports.
Saudi Arabia’s recent total food service sales was estimated at SR33.3 billion ($8.87 billion), accounting for nearly half of the GCC market. The GCC food services market, which recently stood at SR70.5 billion ($18.8 billion), is estimated to grow to a collective value of SR91.9 billion ($24.5 billion) by 2018, according to industry research. The casual dining segment has emerged as the second fastest growing within the food sector market with potential for growth.
Saudi Arabia’s population is forecasted to grow to 40 million by 2050, of which 70 per cent will be aged 30 or under – Saudi Arabia will be a prime audience for restaurants and chain operators.
Most of the major branded restaurants with multiple branches are concentrated in primary and secondary cities. Urbanised population, globally-exposed younger generation who are inspired by food, shopping festivals, exhibitions and events become stimulus to food industry. In combination with high disposable incomes and significant investments in new malls, restaurants and hotels, Saudi Arabia is particularly ripe for global investments in the food service sector notably in casual dining segment to cater to young population.
Industry experts predict significant growth in both revenues and number of outlets in the sector. The current count of full-service chain restaurants, which includes casual dining and fine dining outlets, in the Kingdom stands at almost 1,200, and accounts for a greater part of revenues in the sector. Across Saudi Arabia, a slowdown in several industries seems imminent and inevitable this year, observed Anees Moumina, CEO of Sedco Holding Group, a leading Shariah-compliant organisation.
“Despite the slowdown in economy, Saudi Arabia’s food consumption is forecast to grow by 7.3 per cent in 2016, to SR224.5 billion and projected to reach SR259.4 billion in 2018. In sum, capital spending in the food sector will expand further, while the value of the casual dining sector will increase at a growth rate of 3 per cent per annum,” he said.
Tarfeeh employs 1,000 staff across its restaurant outlets. Moumina said: “Despite potential for the development of the real estate market, construction is lagging behind, and pressure is being felt on the availability of outlets, and rents thereof. Fortunately, Sedco Group, we benefit from the synergy and breadth of our operating companies as we build our strategies working alongside specific committees, and by investing heavily in research and development.”
