Full-Service Restaurants in Saudi Arabia

2020 IMPACT

Full-service restaurants hit the hardest by COVID-19 as restaurants across the Kingdom close their doors

In 2020, as a result of the extending period of national lockdown lasting from March to June, COVID-19 had a distinctly negative impact on full-service restaurants. During the national lockdown period, and to a certain extent beyond the specific periods of lockdown, consumers switched to working and studying at home, curfews were put in place, and non-essential retail outlets, including consumer foodservice outlets, closed their doors to curb the spread of the COVID-19 virus in Saudi Arabia.

Chained full-service restaurants fall behind as consumers cook local favourites at home

On the whole, chained full-service restaurants largely performed worst that independent full-service restaurants in 2020. Of all the subcategories in full-service restaurants, though, amongst the worst performing were chained Asian full-service restaurants and middle Eastern full-service restaurants.

Category suffers from reliance on eat-in sales during COVID-19 pandemic

In 2020, there was a slight shift in the way consumers purchase and consume products from retailers in this category, although the shift was much less noticeable than in other categories such as limited-service restaurants. Eat-in sales continued to dominate the category over all, with only a slight reduction in share, whereas takeaway and home delivery sales only recorded a moderate increase in foodservice value terms, growing from an extremely low base.

RECOVERY AND OPPORTUNITIES

Retailers set to bounce back from COVID-19 as consumers resume their pre-COVID-19 dining habits

In the aftermath of COVID-19, full-service restaurants in Saudi Arabia is expected to make a swift recovery. From 2021, the category is projected to record a positive spike in foodservice value sales and the number of transactions as Chained and Independent full-service restaurants alike recover from the effects of COVID-19.

Category to record strong growth as life returns to normal and women enter the workforce

Growth in full-service restaurants in the forecast period will be stimulated by the growing number of women in the work force and Saudization, all of which have improved the disposable incomes of many local families. More restaurants also provided mixed gender sittings in restaurants, where previously restaurants had segregated seating areas for men and women.

Players await the return of tourists to the Kingdom

Amongst the worst hit players in full-service during the COVID-19 pandemic were pizza full-service restaurants, Asian full-service restaurants and middle Eastern full-service restaurants. The lack of tourism in the Kingdom contributed heavily to the decline in sales felt by these categories.