Restaurant Industry in Saudi Arabia 2021

The country is dotted with fast-food restaurants, cafes and service restaurants, and as per a survey, the food service market is expected to grow at a rate of 12.22%...

Restaurant Industry in Saudi Arabia 2021

Saudi Arabia has been a powerhouse in the MENA region and the galloping economy has led to a truly world-class food & beverage industry in the region. Eating and shopping have always been the two top activities among citizens of Saudi Arabia. The rise in the purchasing power capacity of individuals, a young population, along with robust internet connectivity, have together given an upthrust to the online ordering business of Saudi Arabia -

The increase in demand for home delivery from food providers has contributed and led to very significant growth in the economy of the country. The food service landscape of Saudi Arabia is dominated by leading brands such as Pizza Hut, McDonald’s, Domino’s Pizza, and Starbucks. When it comes to casual dining, leading US brands such as Chili’s, TGI Fridays, Applebee’s, Sizzler, and Fuddruckers again occupy top positions. The ruthless competition among these leading food service brands has left consumers spoilt for choices.

Opportunities Galore in the Saudi Region

The country is dotted with fast-food restaurants, cafes and service restaurants, and as per a survey, the food service market is expected to grow at a rate of 12.22%. This growth can be largely attributed to an increase in smartphone users in the zone, which has now crossed the threshold of 30 million - a significant number indeed. This number is only expected to grow further when the existing 4G technology is superseded by 5G, and this will, in turn, have a direct consequence in the growth of the online food delivery market of the country.

Most of these American, European and local brands have successfully created a loyal customer base over the years, thanks to their razor-sharp focus on ensuring the creation of strong brand awareness. The penetration of the internet in the region has helped these brands create a loyal base. The lure and gratification these brands have succeeded in providing to their customers have also helped them create a loyal base based on a powerful word of mouth of customers. As per a survey conducted by Euromonitor International, Pizza Hut is the number one brand in the region when it comes to full-service restaurants. In the European full-service restaurant segment, it’s Piatto that remains the most popular restaurant chain.

As per a report by Macrothink Institute, restaurants in Saudi generally follow three types of investment models – independent owners, local chains and international franchise. Under the full-service restaurants (which caters to fine dining and casual dining), The Grill Restaurant, Spazio, Apple Bee’s and Steak House are trendy among consumers. In the category of fast-food restaurants, McDonald’s has been ahead in the game for a long time. Though Saudi Arabia saw its first McDonald’s branch only in 1993, it has now mushroomed to more than 200 branches across the length and breadth of the country.

As per a survey by Aaron Allen & Associates, leading global restaurant industry consultancy, conducted a few years back, the top 30 brands in the chained fast food segment accounted for almost 66.3% of the market and McDonald’s, Herfy and Al Baik shared top three positions. Pizza Hut, Kudu, and Shawarmer are other popular restaurants in the fast-food category. The traditional restaurants of Saudi offer local Arabic meals and Al Romansiah and Shawaya House have created a robust and loyal following among customers. Saudi is not known for its café culture but the popularity of Java Time, Starbucks and Dr. Café Coffee indicates otherwise.

Food Delivery Apps are the Way Forward

Amidst the growth of the food service sector, online food delivery has come of age in Saudi Arabia. In a span of a few years, it has seen unprecedented growth. Food delivery apps have seen extremely impressive growth in the region, and now more and more consumers are adopting this new way of dining.

While online food delivery has largely been a boost for restaurants by increasing their order volume and exposing them to a large number of customers, a few challenges have definitely come up. Key amongst them is maintaining a good restaurant health index (RHI). The RHI is a way that food delivery apps rank restaurants, and for these outlets to stay at the top of their game it is essential that their operations are optimised to the highest possible extent. Traditionally, manual billing, processing, and punching of orders leads to inefficiencies, especially when maintaining multiple dashboards for various food aggregators.

This is where UrbanPiper’s Hub solution comes in. Hub provides you a single dashboard to manage all your online channels right from your existing POS system. With Hub, restaurants can manage & scale their business on aggregators by having access to the latest aggregator updates, the highest reliability, & the ability to analyse their performance across aggregators to make decisions that help drive business performance. For restaurants in Saudi Arabia, Hub makes a very compelling solution if they are looking to make use of technology to drive down inefficiencies and stay on top of the game in order to reach the most number of customers.