Value sales, outlet numbers and number of transactions all fell significantly in limited-service restaurants in 2020, seeing double-digit declines due to the impact of the COVID-19 crisis. However, the performance could have been worse, with a notable increase in home delivery and takeaway helping to offset some of the decline in dine-in sales.
Despite seeing a poor performance in 2020, many limited-service restaurants saw a strong level of recovery in 2021, as consumers ordered food for takeaway and home delivery, whilst they also dined out more often as vaccination progressed and the impact of COVID-19 lessened, with tourists also starting to return. This gave some players the confidence to expand their outlet numbers.
Al Baik, a limited-service restaurants brand which is famous in Saudi Arabia for its tasty, crispy chicken at reasonable prices, opened its first permanent outlet in the United Arab Emirates in Dubai Mall in June 2021. It also had a temporary outlet at Expo 2020 from October 2021 to March 2022.
From 26 February 2022, the wearing of masks outside was lifted in the United Arab Emirates. This allows consumers to go and eat out more comfortably and confidently.
The United Arab Emirates was one of the early adopters of cloud kitchens, given the fast-paced and strong delivery culture amongst consumers in the country. These are outlets that prepare food for online delivery orders, but offer no dine-in facility, and the number of such kitchens continues to increase in the United Arab Emirates.
An effective strategy used by manufacturers to attract consumers in retail has been to first launch plant-based meat and dairy products in consumer foodservice outlets in the region. For example, PizzaExpress collaborated with plant-based foods producer Upfield to launch its “Go Green” menu using the cheese alternative Violife, which created a buzz amongst consumers to try Upfield’s products at home.
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Limited-Service Restaurants (LSR) combine fast food and 100% home delivery/takeaway outlets. These outlets offer limited menus with items that can be prepared quickly. Customers typically order, pay, and pick up their order from a counter, though some outlets can have limited table service. This also includes 100% Home Delivery/Takeaway which provide no facilities for consumption on the premises. LSR tend to specialize in one or two main entrees such as hamburgers, pizza, or chicken, but they usually also provide drinks, salads, ice cream, dessert, etc. Food preparation is generally simple and involves one or two steps, allowing for kitchen staffs generally consisting of younger, unskilled workers rather than professional chefs. Other key characteristics include: • A standardised and restricted menu • Tight individual portion control on all ingredients and on the finished product • Individual packaging of each item • Counter service • For Chained Limited Service Restaurants, chained and franchised operations which operate under a uniform fascia and corporate identity • Any outlet offering full-service restaurant seating with servers would be excluded, even if delivery service is available.
This report originates from Passport, our Fast Food research and analysis database.
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