Limited-Service Restaurants in the United Arab Emirates

PROSPECTS

Delivery kitchens become an attractive concept for new market entrants with limited initial capital

As online delivery platforms continue to offer efficient third-party delivery services, new market entrants are finding opportunity by establishing delivery kitchens, where operators only prepare meals for delivery to the orders placed through delivery apps. This is particularly attractive for operators challenged by high rents in optimal locations and/or players with insufficient resources to expand across the cities for greater outreach and better delivery services.

New players offering localised food emerge

New foodservice concepts offering delivery only and localised food are emerging, with new players focussed on offering traditional, home-made cuisine. Most of these concepts featuring Asian and Middle Eastern cuisine target the larger expat community.

Pizza limited-service restaurants focus on premiumisation and new flavours

Whilst pizza full-service restaurants remain the most popular choice of pizza consumers, the pizza foodservice landscape has become more competitive with cafés and other full-service restaurants by offering speciality and gourmet pizza featuring new flavours and healthier alternatives. Whilst the scale of pizza limited-service restaurants remains smaller than that of the pizza full-service restaurants, players in the former category are beginning to offer consumers a greater choice of additional items and ingredients to keep up with the competition.

Meal deals and combo offers lead limited-service players to retain value growth

Limited-service restaurants are now faced with heightened competition, given that the online delivery platforms have increased access for other foodservice platforms as well. Additionally, limited foodservice in the United Arab Emirates has evolved into a diverse range of offerings imported by the diaspora of expat communities coming into the country.

COMPETITIVE LANDSCAPE

Emirates Fast Food maintains its lead with continuous expansion

Emirates Fast Food, holding the franchise rights for McDonald’s in the United Arab Emirates, continued to lead the limited-service category in 2018. Whilst the brand faced shrinking margins as it worked to reduce the impact of value-added taxes across the supply chain and limit the final impact on the consumer price, McDonald’s sustain growth given its strong brand equity and increased number of outlets and drive-through locations.

Healthier consumption becomes a larger trend impacting limited-service restaurants in selected categories

With a general trend towards healthier living in the country, most limited-service restaurants have felt the impact of conscious consumption. Notably, value sales of burger, fish and ice cream limited-service restaurants all declined again in 2018 as consumers avoided high-calorie food.

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