Saudi Arabia Foodservice Market Size and Trends by Profit and Cost Sector Channels, Consumers, Locations, Key Players, and Forecast, 2021-2025

The foodservice profit sector in Saudi Arabia was valued at $13.7 billion in 2020. The market is projected to grow at a CAGR of more than 8% during the period 2021-2025. The sector’s decline can be attributed to a substantial fall in the number of transactions as a result of the COVID-19 crisis, which led to the enforcement of a national lockdown from March 2020 to June 2020, as well as operational restrictions on foodservice outlets.

In the profit sector, full-service restaurants (FSR) was the leading channel in 2020 followed by quick service restaurants (QSR); and coffee & tea shop. The education segment dominated the cost sector, followed by military & civil defense; welfare & services; and healthcare. Overall, profit sector channels will record an increase in average transaction value in the coming years, mainly due to an increase in VAT. As the country returns to some semblance of ‘normality’, dine-ins will continue to dominate foodservice volumes.

Overview of Saudi Arabia’s foodservice profit sector

For more insights on this report, download the free report sample

What are the market dynamics in Saudi Arabia’s foodservice market?

Amid growing fears of COVID-19 infection, the Saudi Government imposed strict lockdown measures, including restrictions on travel and on-premise outlets. This had a major impact on foodservice sales in 2020. Consumers were forced to stay at home for large parts of the year, thus boosting the prevalence of home cooking and at-home consumption. Saudi consumers limited their visits to restaurants and other food outlets due to either dine-in restrictions or fear of COVID-19 infection. As a result, many consumers opted for food delivery services to enjoy meals at home.

Thanks to its strategic location, Saudi Arabia is a tourist hotspot. Therefore, strong value growth will encourage international brands to enter the market. Although local cuisine remains popular, Saudi consumers are becoming increasingly experimental. In response to this, operators are adding more unusual items to their menus.​ Growing health awareness will continue to drive consumers’ interest in healthy indulgence. Consumers’ desire for “better for you” options offer brands an opportunity to focus on menu innovation. As they spend more time at home amid the ‘new normal’, consumers are becoming more and more digitally connected​.

What are the sector classifications in Saudi Arabia’s foodservice market?

The foodservice market is segmented into the profit sector and cost sector. The cost sector typically represents the state’s foodservice operators while the profit sector represents the commercial operators.

Profit Sector:

Quick service restaurants market in Saudi Arabia

Standalone establishments were most popular, followed by outlets in shopping arcades. McDonald’s was the largest quick-service restaurant operator, in 2020. Other key chains include The Savola Group, Domino’s Pizza, Yum Brands, and Restaurant Brands International. Online platforms helped the QSR channel immensely during the COVID-19 crisis. In the future, however, the focus will return to dine-in services as consumers shift back to their pre-pandemic habits.

Full-service restaurants market in Saudi Arabia

The FSR channel is fragmented. Yum! Brands, Inc.’s Pizza Hut was the largest brand in terms of sales in 2020, followed in a distant second place by AmoHamza Seafood Restaurants Company. After being in lockdown for most of 2020, Saudis will be eager to dine out more often and will visit FSRs that offer attractive menus and ambience. Restaurants offering international dishes, such as Nobu and Mamo’s, will prove especially popular, with tourism restrictions remaining in place.

Coffee & tea shop market in Saudi Arabia

Independent operators account for majority of outlets, and their penetration is gradually increasing. Dine-ins dominate the channel and will continue on an upward trajectory in the wake of the pandemic. Increasing transaction price will drive future value growth as key operators compete on quality and menu innovation, rather than simply price.

Foodservice market in Saudi Arabia, by profit sector

For more channel insights, download a free report sample

Cost Sector:

Healthcare foodservice market in Saudi Arabia

During 2020–2025, healthcare will record marginal growth in the number of transactions. The number of outlets will also be stagnant during the forecast period. Healthcare registered the highest growth rate in terms of the transaction number.

Education foodservice market in Saudi Arabia

Education is the largest channel in the Saudi cost sector. However, due to the closure of schools and educational institutions in 2020, it suffered a fall in outlet numbers during 2015–2020, while transaction numbers also dropped. In the coming years, the education channel is forecast to remain the largest channel in Saudi Arabia’s foodservice cost sector in terms of OBP value. Furthermore, during 2020–2025, the channel is set to achieve the highest growth in terms of transactions and outlet numbers.

Military & civil defense foodservice market in Saudi Arabia

Military & civil defense, the sector’s second-largest channel, posted transactional and outlet growth during 2015–2020. The military & civil defense channel is anticipated to record marginal growth in the number of transactions and number of outlets, during 2020–2025.

Welfare & services foodservice market in Saudi Arabia

Welfare & services registered the highest growth in outlet number during 2015–2020. The category also recorded notable growth in a number of transactions.

Foodservice market in Saudi Arabia, by cost sector

For more channel insights, download a free report sample

Who are the major market players in the foodservice market in Saudi Arabia?

In the QSR channel, Mcdonald’s is the leading market player followed by The Savola Group, Domino’s Pizza, Yum Brands, and Restaurant Brands International. Yum! Brands, Inc. dominates the FSR channel, followed by AmoHamza Seafood Restaurants Company. The coffee & tea shop channel comprises players such as Dunkin’ Brands Group, Al Yemni Group, and Starbucks Corporation.

QSR foodservice market in Saudi Arabia, by key players

To know more about key players, download the free report sample

Market report scope

This report provides a comprehensive analysis of the foodservice market in Saudi Arabia.

• Overview of Saudi Arabia’s macro-economic landscape: Detailed analysis of current macro-economic factors and their impact on Saudi Arabia’s foodservice market including GDP per capita, consumer price index, population growth, and annual household income distribution.
• Growth dynamics: In-depth data and forecasts of key channels (QSR, FSR, and coffee & tea shops) within Saudi Arabia’s foodservice market, including the value of the market, number of transactions, number of outlets, and average transaction price.
• Customer segmentation: Identify the most important demographic groups, buying habits, and motivations that drive out-of-home meal occasions among segments of Saudi Arabia’s population.
• Key players: Overview of market leaders within the four major channels including business descriptions and number of outlets.
• Case Studies: Learn from examples of recent successes and failures within Saudi Arabia’s foodservice market.

Reasons to Buy

• Specific forecasts of the foodservice market will give readers the ability to make informed business decisions by identifying emerging/declining markets.
• Consumer segmentation detailing the desires of known consumers among all major foodservice channels (QSR, FSR, and coffee & tea shops) will allow readers to understand the wants and needs of their target demographics.
• Relevant case studies will allow readers to learn from and apply lessons discovered by emerging and major players within Saudi Arabia’s foodservice market.