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Saudi Arabia - The Future of Foodservice to 2021

Saudi Arabia - The Future of Foodservice to 2021

Summary

Fluctuating oil prices have had a considerable impact on Saudi Arabian GDP, with the government carrying out major reforms to their public spending as a result. They have raised the price of petrol, introduced taxes on sugary drinks, energy drinks and tobacco and will soon introduce VAT on a wide range of products, contributing to rising prices.

Value in the Quick Service Restaurants (QSR) channel within the foodservices industry is expected to grow at a CAGR of 7.3% until 2021 to SAR22.1 Billion. Growth will be driven predominantly by increasing numbers of transactions and rising prices, with outlet growth expected to be slow. Urbanized, busy young consumers are seeking out foodservice to fulfil their food cravings as changing roles of women and westernized lifestyles encourage more dining out occasions.

With a 48% share of the profit sector in Saudi Arabia, Full Service Restaurants (FSR) is the leading channel in terms of sales value. In 2016, the market had a value of SAR29.9 Billion, with growth accelerating to 7.2% until 2021, reaching a channel value of SAR42.3 Billion. Along with higher footfall, a large share of growth will also stem from rising prices, which is set to help drive average transactions to increase at a CAGR of 4.8% to 2021.

The coffee and tea shop channel has a relatively small share of the Saudi Arabian foodservice market, accounting for 6.9% of the profit sector in 2016. This is expected to reach a channel value of SAR5.7 Billion by 2021. The channel has become well established as a social venue for young, westernized Saudis looking for an energy fix.

Going forward, the market is forecast to grow at a slower rate than other restaurant channels, due to the low value of transactions and more limited range of food offerings. The market for social, drinks-led occasions out of the home is not sufficiently developed for growth to occur as fast as in the QSR and FSR channels, which are suited to a much broader range of occasions.

The report Saudi Arabia - The Future of Foodservice to 2021 provides extensive insight and analysis of Saudi Arabia's foodservice market over the next five years (2016-2021) and acts as a vital point of reference for operators or suppliers.

In particular, this report provides the following analysis -

  • Overview of Saudi Arabia's macro-economic landscape: Detailed analysis of current macro-economic factors and their impact on the Saudi Arabian foodservice market including GDP per capita, consumer price index, population growth and annual household income distribution.
  • Growth dynamics: In-depth data and forecasts of key channels (QSR, FSR and Coffee & Tea Shops) within the Saudi Arabian foodservice market, including the value of the market, number of transactions, number of outlets and average transaction price.
  • Customer segmentation: Identify the most important demographic groups, buying habits and motivations that drive out-of-home meal occasions among segments of the Saudi Arabian population.
  • Key players: Overview of market leaders within the four major channels including business descriptions and number of outlets.
  • Case Studies: Learn from examples of recent successes and failures within the Saudi Arabian foodservice market.
Companies mentioned in this report: DineEquity, Domino's Pizza, Herfy, Kudu, Piatto, Maestro Pizza, McDonald's, Pizza Hut, The Savola Group, Yum! Brands.

Scope
  • Between 2014 and 2016, sales value in QSR rose at a strong CAGR of 7.0% to reach SAR15.6 billion. Despite economic troubles and a fairly high unemployment rate, organic population growth, evolving gender roles and a young, urban population will continue to drive strong growth in QSR, with sales value set to grow from SAR15.6 billion to SAR22.1 billion by 2021.
  • The FSR channel is the dominant profit sector channel and accounts for nearly 48% of the Saudi Arabian market, with QSR representing 25%. Due to the absence of pubs, clubs and bars in Saudi Arabia, restaurant channels benefit from a boost in visits for social occasions. However, segregation of men and women has continued to complicate operations. Indeed, international players such as Starbucks have at times struggled to balance satisfying local cultural demands with maintaining their international image.
  • Sales value in coffee and tea shops is forecast to grow at a slower rate than in other restaurant channels, partially reflecting the channel’s lower transaction values and more limited range of food offerings. With social, drink led occasions important to coffee and tea shops, the rise of casual dining brands is expected to increase competition for these occasions.
Reasons to buy
  • Specific forecasts of the Saudi Arabian foodservice market over the next five years (2016-2021) will give readers the ability to make informed business decisions through identifying emerging/declining markets.
  • Consumer segmentation detailing the desires of known consumers among all major foodservice channels (QSR, FSR and Coffee & Tea Shops) will allow readers understand the wants and needs of their target demographics.
  • Relevant case studies will allow readers to learn from and apply lessons discovered by emerging and major players within the Saudi Arabian foodservice market.


  • Introduction
    • Report Guide: Main Sections
    • Report Guide: Sub-Sections
    • Executive Summary
    • Executive Summary: Consumer Trends
  • Macroeconomic context
    • Macroeconomic Overview
    • Demographic Overview: Population
    • Demographic Overview: Income Bands
  • Introducing consumer segments
    • Introducing Consumer Segments: Constructing the Segments
    • Introducing Consumer Segments
    • Introducing Consumer Segments: Frugal Convenience-Seekers
    • Introducing Consumer Segments: Time-Poor Experimenters
    • Introducing Consumer Segments: Sporadic Splurgers
    • Introducing Consumer Segments: Regimented Routiners
    • Introducing Consumer Segments: Inbetweeners
    • Introducing Consumer Segments: Key Channel Overview
  • Profit sector
    • Profit Sector Metrics
      • Table Strong growth forecast across profit sector channels
    • Profit Sector: Value and Share by Channel
    • Profit Sector: Value Growth by Channel
    • Profit Sector: Outlets and Growth by Channel
    • Profit Sector: Transactions and Growth by Channel
    • Profit Sector: Operator Buying Volumes and Growth by Channel
    • Profit Sector: Channel Historic Growth Dynamics
    • Profit Sector: Channel Future Growth Dynamics
    • Profit Sector: Restaurant: Outlet-Type Growth Dynamics
      • Table Restaurant outlet types 2016 value growth
    • Profit Sector: Restaurant: Type of Ownership Growth Dynamics
      • Table Restaurant owner types 2016 value growth
  • Quick service restaurants (QSR)
    • QSR: Summary
    • QSR: Metrics: Growth Dynamics
      • Table Transactions continue to grow despite rising prices
    • QSR: Key Players
    • QSR: Key Consumers: Segment Overview
    • QSR: Key Consumers: Frugal Convenience Seekers
    • QSR: Key Consumers: Time-Poor Experimenters
    • QSR: Key Consumers: Sporadic Splurgers
    • QSR: Key Consumers: Regimented Routiners
    • QSR: Key Consumers: Inbetweeners
    • QSR: Key Consumers: Opportunity Areas
    • QSR: Why?
    • QSR: Why: Maestro Pizza Case Study
    • QSR: Why: Maestro: Trends Targeted
    • QSR: Why: Maestro: How
    • QSR: What?
    • QSR: What?: Food and Drink Splits
      • Table Operator buyer product value SAR million (USD$ million)
    • QSR: Where?
    • QSR: What Next?
  • Full service restaurants (FSR)
    • FSR: Summary
    • FSR: Metrics: Growth Dynamics
      • Table Transactions and rising prices drive value growth
    • FSR: Key Players
    • FSR: Key Consumers: Segment Overview
    • FSR: Key Consumers: Frugal Convenience Seekers
    • FSR: Key Consumers: Time-Poor Experimenters
    • FSR: Key Consumers: Sporadic Splurgers
    • FSR: Key Consumers: Regimented Routiners
    • FSR: Key Consumers: Inbetweeners
    • FSR: Key Consumers: Opportunity Areas
    • FSR: Why?
    • FSR: What?
    • FSR: What?: Food and Drink Splits
      • Table Operator buyer product value SAR million (USD$ million)
    • FSR: Where?
    • FSR: What Next?
  • Coffee and tea shops
    • Coffee & Tea Shops: Summary
    • Coffee & Tea Shops: Metrics: Growth Dynamics
      • Table Rising prices to put coffee & tea shops under pressure, but transactions set to rise
    • Coffee & Tea Shops: Key Players
    • Coffee & Tea Shops: Key Players
    • Coffee & Tea Shops: Key Consumers: Segment Overview
    • Coffee & Tea Shops: Key Consumers: Frugal Convenience Seekers
    • Coffee & Tea Shops: Key Consumers: Time-Poor Experimenters
    • Coffee & Tea Shops: Key Consumers: Sporadic Splurgers
    • Coffee & Tea Shops: Key Consumers: Regimented Routiners
    • Coffee & Tea Shops: Key Consumers: Inbetweeners
    • Coffee & Tea Shops: Key Consumers: Opportunity Areas
    • Coffee & Tea Shops: Why?
    • Coffee & Tea Shops: What?
    • Coffee & Tea Shops: What?: Food and Drink Splits
      • Table Operator buyer product value SAR million (USD$ million)
    • Coffee & Tea Shops: Where?
    • Coffee & Tea Shops: What Next?
  • Cost sector
    • Cost Operator Trends: Historic Growth
    • Cost Operator Trends: Future Growth
    • Cost Operators: Data Breakdown
      • Table Education leads cost sector with 66% share
  • Appendix
    • Trade and Sectors Definitions
    • Channel Definitions
    • Other Definitions
    • Key Components - Market Intelligence

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