Saudi food consumption to grow by 7.3pc
Saudi food consumption to grow by 7.3pc
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 population 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.”
Saudi Arabia’s casual dining in numbers
With total food service sales recently recorded at SR33.3 billion, Saudi Arabia has by far, the lion’s share of the region. Under this umbrella, it is the ‘fast food and quick service’ category that is the largest, and notably, it is ‘casual dining’ which is growing the second fastest at a growth rate of 3 per cent per annum.
Casual dining is a concept that has been rapidly gaining popularity. These restaurants offer the quality of fine dining combined with the speed of fast food, at affordable prices.
In the last 15 or so years, Saudi Arabia’s casual dining sector has witnessed very healthy growth rate, and major brands penetrating the market – several new entries have been made every year - have driven a 10 per cent increase in the number of chain restaurants, and 5 per cent increase in independent casual dining restaurants.
Tarfeeh, a Sedco Holding Company that runs Applebee’s, Macaroni Grill, and Ocean Basket, already enjoys the status of being Saudi Arabia’s largest company in the casual dining franchisee sector.
Ahmed Marashde, CEO of Tarfeeh, said: “Whilst the Gulf region as a whole has immense potential, Saudi Arabia outperforms all other regional markets and it is the remote areas within Saudi Arabia that singularly stand out as investment hubs.”
“To leverage geographical opportunities, we will be embarking on ambitious missions and an aggressive expansion plan to open many more outlets across the entire Kingdom.
“With support extended by our sister companies within the Sedco Group’s portfolio, in terms of facility management and services, labour and maintenance needs, real estate and property development and management, we will ensure that Tarfeeh makes progress with our plans for the near future - to acquire more master franchises and open several new outlets across the Kingdom.”
“In line with today’s industry trends, we are always on the lookout for offering new services to our customers; we are currently looking into developing our home delivery and online food service which is yet another potential revenue and employment channel,” Marashde concluded.
source: Trade Arabia Business News Informations