In 2020, as the category faced the upheaval of the COVID-19 pandemic and strict national lockdown restrictions lasting from March to June, the most successful subcategories in value terms were chained chicken limited-service restaurants followed by chained burger limited-service restaurants. This is primarily due to the fact that most brands in these subcategories already had apps and delivery networks in place before the COVID-19 pandemic broke out in Saudi Arabia, which helped to support the provision of takeaways as the only source of income during the national lockdown periods.
Ice cream limited-service restaurants and middle Eastern limited-Service restaurants were amongst the worst hit by the COVID-19 pandemic and associated lockdown restrictions in 2020. Ice cream suffered in 2020 as products sold in these outlets are viewed as non-essential treats and so were not at the top of consumers’ spending priorities at a time when consumers in Saudi Arabia were feeling the pinch.
During the lengthy period of mandatory national lockdown from March to June 2020, players in limited-service restaurants lost sales through eat-in service as restaurants across the kingdom were forced to close their doors to walk-in customers. A large number of brands in this category already had online ordering and delivery platforms in placed, which helped them to ensure the continuation of takeaway and delivery services, making it easier to switch their operations entirely online for much of 2020.
In the forecast period, limited-service restaurants looks set to bounce back with double digit growth expected for 2021 and 2022 in terms of both foodservice value sales and the number of transactions. As the roll-out of the COVID-19 vaccine takes place and the fear of further national lockdown periods subsides, consumers will be eager to return to their favourite foodservice outlets in the forecast period.
In the forecast period, chained pizza limited-service restaurants are expected to lead foodservice value and transaction growth, followed by chained chicken limited-service restaurants. These categories will benefit from strong promotional activity at a time where consumers are expected to prioritise price in their decision making.
In the forecast period eat-in sales are expected to recover as the threat of COVID-19 subsides, but they will not rebound immediately to pre-COVID-19 sales. At the beginning of the forecast period consumers will be slow to return to foodservice outlets due to the continued threat of the virus, and takeaway and delivery sales will continue to be higher than in pre-COVID-19 times.
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