Saudization is being seriously executed at a very fast pace and the number of Saudi Arabians in the workforce, both men and women, is significantly growing across all areas in Saudi Arabia, with a lot of industries now only employing Saudi Arabians. Since Saudi Arabians have a clear and dedicated passion for coffee thanks to their traditional culture, this makes it a very important item for them to buy.
Due to the restricted environment of Saudi Arabian culture, locals entertain themselves through road trips, since Saudi Arabia is basically part of the desert, so road trips are considered as a traditional hobby. Brands take this opportunity to generate sales from these trips through the street stalls/kiosks that serve these customers.
Street stall/kiosk operators mainly serve drinks as their main commodity, but with the development of the channel as street stalls/kiosks expand across the country, in 2018 brands started to offer more food variety to serve different customer segments. This is consequently leading to growth in this channel, which is maintaining a strong presence in the country.
BarnCafé, which is operated by Al Amjaad Establishment, remained the leading brand in street stalls/kiosks in value sales terms in 2018, followed by Derby Coffee and Khafif. BarnCafé benefits from a strong presence in petrol stations and on the main roads and city streets.
Derby Coffee and Khafif were facing difficult times in the final years of the review period due to the increasing competition from local independent street stalls/kiosks, which continue to increase their outlet numbers every year and offer a wide variety of menu items at very competitive prices to attract more customers. The problems for Derby Coffee and Khafif can be seen in their declining number of outlets across the country over the review period, negatively affecting their presence in the marketplace.
It is expected that the overall street stalls/kiosks channel will face strong competition from specialist coffee and tea shops, such as Starbucks, which offer a drive-thru service for their customers, which makes it difficult for street stalls/kiosks to compete against. Street stall/kiosk players will have to come up with new and innovative ideas to overcome this strong competition, especially when it comes to a strong player like Starbucks.
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Discover the latest market trends and uncover sources of future market growth for the Street Stalls/Kiosks industry in Saudi Arabia with research from Euromonitor's team of in-country analysts.
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This industry report originates from Passport, our Consumer Foodservice market research database.