DUBLIN--(BUSINESS WIRE)--The "Saudi Arabia Foodservice Market - Growth, Trends, COVID-19 Impact and Forecasts (2021 - 2026)" report has been added to ResearchAndMarkets.com's offering.
Saudi Arabia foodservice market was valued at USD 22.42 billion in 2020, and it is projected to register a CAGR of 8.90% during the forecast period, 2021-2026.
There has been a definite impact of the coronavirus outbreak on the overall foodservice business, with various segments being affected in varying degrees in Saudi Arabia. Foodservice operators and caterers are on the front line of rising inflation, as the Catering Price Index (that is affected by the price and sales of food products) rose by 2.0% from the previous year i.e. 2019, boosted by food price hikes.
In-restaurant dining is the worst-hit segment, largely due to the travel curbs and a general avoidance of people getting into larger gatherings and social distancing regulations, thereby closing the increasing number of restaurants in the country and reducing their profits subsequently. For instance, HerfyFood Services Company, a Saudi food service company, reported a 16.40% drop in its revenue from the year 2019 to 2020, due to the impact of COVID-19 in the country (as per the annual report of Savola Group).
However, the increasing demand for home delivery and foodservice providers is expected to drive the market's growth. Increasing health consciousness and growing rate of obesity among the Saudi Arabian population are challenging the market.
The full-service restaurant segment accounted for the major share in the market, owing to the strong presence of the millennial population, the growing tourism industry, and acceptance of western culture across the country. Consequently, the United States casual dining restaurants, such as Chili's, Fuddruckers, TGI Fridays, Applebee's, Sizzler, and On The Border, are very popular and located in all the major cities of Saudi Arabia.
Key Market Trends
Increasing Internet Connectivity and Consumer Spending
The growth of the Saudi Arabian online food delivery market is driven by a young futuristic population, rising purchasing power, internet connectivity, and modern and changing lifestyles. As per the data published by ITU, Saudi Arabia ranks third in terms of smartphone penetration, globally, and it is ahead of countries, such as the United States, Britain, France, and Germany.
Moreover, in the country, the share of mobile payments is expected to increase shortly, due to increased consumer confidence, mainly posed by the increasing safety measures taken by the Saudi Arabian government toward the security of online payments. Additionally, other key market indicators, such as consumer spending, are recording robust growth in the country, thereby providing widespread opportunities for the online food delivery market.
Thus, the Kingdom of Saudi Arabia represents a unique opportunity for unmatched growth in the online-food-ordering platform. The online food ordering industry is expected to continue to witness rapid growth, and it is expected to emerge as the fastest growing industry in the e-commerce arena.
Full-service Restaurants Led the National Market Growth
The full-service restaurant segment is highly competitive in Saudi Arabia, owing to the presence of a large number of small and major players. The country's consumers, including the high number of expats and tourists, are tilted toward western-style casual dining, especially the European and American cuisines.
Consequently, the United States casual dining restaurants, such as Chili's, Fuddruckers, TGI Fridays, Applebee's, Sizzler, and On The Boarder, are very popular and located in all the major cities of Saudi Arabia.
Independent foodservice channels maintain a dominant position in the full-service restaurant segment, as they provide dine-in restaurant services with an extensive menu. During Ramadan, to attract consumers, full-service restaurants, including Hyatt Regency Tent and The Ritz-Carlton Residences, are trying to compete with local restaurants to provide a better culinary experience, which is driving the market further.
Competitive Landscape
The Saudi Arabia foodservice market is a competitive market with numerous players existing in the market. The United States-based fast-food chains continue to dominate the fast-food restaurant sector in this region, with food chains like McDonald's, Pizza Hut, Burger King, Starbucks, and Domino's Pizza accounting for a significant presence.
The leading players in the foodservice market enjoy a dominant presence in this region. There is stiff competition among the foodservice providers based on pricing, quality of food service, calorie intake per meal, and healthier menu options.
Companies Mentioned
- McDonald's Corporation
- Domino's Pizza Inc.
- Yum! Brands Inc.
- Restaurant Brands International Inc.
- Starbucks Corporation
- Herfy Food Services Co. (Savola Group)
- Albaik Food Systems Company SA
- Al Tazaj
- CKE Restaurants Holdings Inc
For more information about this report visit https://www.researchandmarkets.com/r/xes9o2
