Limited-Service Restaurants in Saudi Arabia

PROSPECTS

Burger limited-service restaurants maintain their popularity

After bakery products, burger is the biggest food type in limited-service restaurants, with burgers continuing to be a favourite food type and a strong seller in Saudi Arabia, with meat generally eaten by most consumers and burgers served to meet different segments of people. With burgers having a high level of calories, some players are now offering low-calorie burgers served on brown bread, while other players like McDonald’s are offering customers the option to create their own sandwich to best meet their tastes at reasonable prices.

Fish limited-service restaurants are emerging in Saudi Arabia

Fish limited-service restaurants are emerging in Saudi Arabia, with competition in limited-service restaurants increasing in a number of channels, but fish limited-service restaurants still being completely neglected by food investors until recently. It therefore represented an important opportunity for smart investors to enter fish limited-service restaurants, especially with the increasing health and wellness awareness among consumers, in particular the country’s youth, who continue to strongly influence the food market.

Women and the youth are the main drivers of foodservice

With the increasing percentage of Saudization across the country in 2018, the percentage of women joining the workforce is increasing, with the lifting of the ban on women driving – one of the biggest signs of liberation in the country – also helping to encourage a lot of women to go out to work. The youth population has been driving the foodservice market for a long time, not least because of their increasing numbers.

COMPETITIVE LANDSCAPE

McDonald’s still the leading player

McDonald’s, which is operated by various franchisees, remained the leading brand in limited-service restaurants in value sales terms in 2018. It was also the leading brand in terms of number of outlets and transactions.

Maestro Pizza driving pizza limited-service restaurants over the review period

Maestro Pizza, which is operated by Daily Food Co, was the fastest-growing brand in Saudi Arabia among pizza operators during the review period, overtaking Domino’s Pizza as the biggest pizza brand in the country. Maestro Pizza is the main driver of the pizza channel, boosted by the fact that it is a Saudi Arabian brand and also the cheapest pizza player in the local market.

Food aggregators are boosting limited-service restaurants sales

Due to the difficult economic situation that the country has been experiencing, restaurants have been trying to find strategies to boost their sales, since many food brands lost customers and online orders declined, especially after the departure of a huge number of expatriates. Restaurants had to partially depend on food aggregators, such as Talabat, HungerStation, Jahez, Uber Eats and Carriage, to make up for these lost customers and orders, with new food aggregators seemingly being launched every month in Saudi Arabia in 2018, which was an indicator of the growth of this platform.

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