What elements make the mid-sector eating market in Saudi Arabia a viable alternative for resort F&B to dominate?
To start with, we outline the mid-sector as meals priced between SAR 150 and SAR 200 (USD 40-55) web per particular person diner. At the moment, quick-service eating places and cafés dominate Saudi Arabia’s foodservice market, accounting for greater than 65 p.c of the overall trade share. In distinction, the mid-market eating section represents lower than 20 p.c in Saudi Arabia, which is considerably decrease than Dubai’s 40 p.c share. This clear disparity alerts robust potential for resort meals and beverage shops to deal with rising demand within the underserved mid-sector house. Furthermore, resort venues can leverage built-in footfall, city growth, rising disposable incomes and evolving tastes of youthful, globally influenced Saudi customers right now.
What does KSA’s market development projections appear like?
Inside Saudi Arabia, full-service eating places are increasing sooner than QSR and informal eating, rising at 8.3 p.c versus 6.5 p.c. Nonetheless, Dubai’s mid-market restaurant section is rising greater than twice as quick, with a projected compound annual development fee of 19 p.c. Due to this fact, this efficiency hole suggests Saudi Arabia’s mid-sector is approaching a tipping level towards accelerated improvement and stronger investment-driven momentum forward.
Moreover, we imagine evolving social norms and altering existence will considerably affect and drive mid-sector restaurant development throughout the dominion in coming years.
What distinctive benefits do resort F&B venues have over standalone mid-market eating places?
To begin with, resort meals and beverage venues in Saudi Arabia maintain aggressive benefits over mid-market impartial eating places but stay largely underutilized. Though 73 p.c of the full-service market consists of standalone venues, accommodations get pleasure from built-in demand from company, occasions and conferences. Furthermore, accommodations profit from robust model fairness, premium city areas and higher operational effectivity in comparison with fragmented impartial restaurant rivals. Moreover, rising affluence, feminine workforce participation and elevated F&B spending create robust circumstances for resort eating places to outperform friends. Lastly, resort venues usually provide handy parking — a sensible, on a regular basis benefit hardly ever accessible at standalone eating places inside crowded city eating districts.
What can we study from different worldwide cities?
To start with, Saudi Arabia’s mid-sector represents simply 17 p.c, which is considerably decrease than different markets together with Dubai, Paris and the UK. Actually, the dominion’s mid-sector share equals solely one-third of the UK’s, reflecting a transparent hole in market improvement. In the meantime, Saudi Arabia holds a center floor in QSR market share — 40 p.c — between Singapore’s 67 p.c and Dubai’s 33 p.c respectively. Moreover, informal eating thrives in London and Paris, supported by robust native identification, walkable city layouts, and well-established meals tradition. Conversely, Dubai showcases how resort eating can succeed by leveraging daring culinary ideas, branded experiences, and aggressive advertising and marketing methods for visibility. Due to this fact, accommodations in Saudi Arabia should deal with perceptions of value, entry, and ritual to draw and develop mid-sector eating audiences.
What’s stopping resort F&B within the kingdom from taking the lead and concentrating on the mid-market sector?
The restaurant market within the kingdom is quickly evolving, and Riyadh and Jeddah more and more replicate Dubai’s mannequin of worldwide manufacturers. Nevertheless, we view this as a transitional part, as Saudi Arabia is poised to carve out its personal culinary path.
One potential problem hindering accommodations from getting into the mid-market section is the expertise of operators from markets like Dubai and Abu Dhabi. Because of this, some resort leaders could imagine accommodations can’t compete successfully with standalone eating places, but we disagree with this view. Actually, Saudi Arabia is uniquely positioned — greater than anyplace else globally — for accommodations to rise, compete and take management on this market.
