Market Overview

In 2024, Saudi Arabia's food service market is projected to generate approximately USD 32.2 billion in revenue, with an anticipated growth rate of 8.8% annually, reaching USD 53.3 billion by 2030. This growth is driven by a surge in demand for home delivery services and an increase in the number of restaurants and retail malls across the country.

Technological advancements, particularly the use of IoT and AI in managing food service supply chains, are also contributing to market expansion. Urban areas such as Riyadh, Jeddah, and Dammam are experiencing higher demand for convenient meal options due to urbanization and evolving lifestyles.

The convenience of online food ordering is increasingly appealing to busy professionals and families, further accelerating the growth of the food service sector. Notably, in January 2024, Hunger Station launched its delivery services in NEOM, marking a significant step as the first domestic company in the region to use electric and hybrid vehicles for efficient food delivery.

Digital transformation has notably impacted the food service industry in Saudi Arabia, with IoT technology enabling real-time monitoring of inventory, temperature, and humidity during transit. Additionally, in December 2023, NEOM introduced ‘Topain’, a new food company aimed at revolutionizing food production and distribution with innovative and sustainable practices.

The market is also seeing expansion from international restaurant chains setting up new locations in Saudi Arabia, particularly in Riyadh and Jeddah. This trend is supported by Crown Prince Mohammed bin Salman's Vision 2030 plan, which aims to enhance tourism, diversify food offerings, and attract both domestic and international investment into the restaurant industry.

Key Insights

·         Full-service restaurants will lead the market with a 35% share in 2024, driven by the popularity of family outings in Saudi Arabia.

·         The cafes and bars category is expected to grow at the highest CAGR of 9.2% due to their casual atmosphere and social interaction spaces.

·         Independent outlets will hold a 65% market share in 2024, offering unique dining experiences that cater to personalized preferences.

·         Chain outlets are projected to grow at a 9.0% CAGR, as they provide consistent menus and convenience.

·         Western cuisine will dominate the market with a 45% share in 2024, thanks to the expansion of fast-food options like burgers and pizza.

·         Asian cuisine is expected to experience the highest CAGR due to its health benefits and appeal to both locals and international tourists.

·         Dine-in options will have the largest market share in 2024, supported by increased urbanization and lifestyle changes.

·         The delivery category is forecasted to grow at the highest CAGR, driven by its convenience and variety, especially among younger consumers.

·         Al-Riyadh will account for 40% of the market revenue in 2024 and is anticipated to have the highest CAGR.

·         Al-Riyadh is home to numerous international food brands and features significant developments such as Al Mamlaka social dining.

·         In April 2024, Meituan will launch KeeTa, an international food delivery platform, in Riyadh.

·         In February 2024, Barbra will enter Saudi Arabia, collaborating with Big Apple Sweets to open 10 new locations by February 2025.

·         Pizza Inn, part of Rave Restaurant Group, will expand in Saudi Arabia with a franchise agreement with Blessings Basket Company.

·         Pizza Inn and Blessings Basket plan to open 50 new restaurants in the region.

·         These developments highlight the ongoing expansion and modernization of the food service market in Saudi Arabia.

Source: P&S Intelligence