Saudi Arabia Food Services Market By Type (Full-Service Restaurants, Quick Service Restaurants, Others), By Ownership (Standalone Outlets, Chained Outlets), By Brands (Domestic, International), By Region, Competition, Forecast & Opportunities, 2020-2030F

Market Overview

The Saudi Arabia Food Services market was valued at USD 31.45 Billion in 2024 and is expected to grow to USD 59.87 Billion by 2030 with a CAGR of 9.04% during the forecast period. The Saudi Arabia Food Services market is primarily driven by a combination of factors. Urbanization and a growing population, particularly among the youth, have increased demand for convenient dining options. Rising disposable incomes have led to a greater willingness to spend on dining out and food delivery services. The country’s Vision 2030 initiative, which aims to diversify the economy, has also contributed to growth in the food services sector, with increased investment in the tourism and hospitality industries. The influx of international restaurant chains and local startups offering a wide range of cuisines caters to evolving consumer preferences, such as healthier and premium dining options. Also, the surge in online food delivery and quick-service restaurants (QSRs) is further accelerating market growth.

Key Market Drivers

Expansion of Fast-Food Chain Across the Region

The expansion of fast-food chains across Saudi Arabia is a significant driver in the country’s food services market. As a part of this, as of 2023, Herfy Food Services, a leading Saudi Arabian fast-food chain, has expanded into Africa with the launch of two franchise outlets in Abuja and one in Kano, Nigeria. The local operations in Nigeria are being managed by Eatrite Food Services West Africa, which entered a partnership with Herfy in 2021. Eatrite plans to open 50 Herfy outlets in Nigeria over the next ten years. As the region experiences rapid urbanization and a growing, youthful population, there is an increasing demand for quick, convenient dining options, which fast-food chains are well-positioned to provide. International fast-food brands, including McDonald's, KFC, and Domino's, have significantly expanded their presence, attracting both local and expatriate consumers with their familiar menus and quick service. Also, local fast-food chains have also emerged, catering to specific tastes and preferences, while contributing to the overall diversity of the market. Fast-food chains are capitalizing on the rising trend of eating out and the growing popularity of delivery services. In addition, the ease of expansion in high-traffic areas such as malls, commercial centers, and along busy roads supports their growth. The increased adoption of digital ordering platforms and delivery apps further amplifies the reach of fast-food chains, creating new revenue streams. This expansion aligns with Saudi Arabia’s Vision 2030, which focuses on developing the hospitality and foodservice sectors, contributing to economic diversification and job creation in the region.

Increasing Government Support to Strengthen the Food Sector

Increasing government support is playing a pivotal role in strengthening the food services sector in Saudi Arabia. As part of this, as of June 2023, the National Industrial Strategy supports the measures for economic diversification and food security outlined in the Vision 2030 blueprint.  One key strategy has been to attract international investment and foster local entrepreneurship, especially in food-related businesses. The government’s support for the food services market includes providing incentives, facilitating easier access to financing, and improving the overall business environment for both domestic and foreign companies. Also, the Saudi government has introduced initiatives to modernize food safety regulations and streamline procedures for opening and operating foodservice establishments. The Saudi Food and Drug Authority (SFDA) plays a crucial role in ensuring quality and safety standards, which enhances consumer confidence in foodservice establishments. Also, the government has focused on enhancing the country’s infrastructure, including transportation and logistics, making it easier to supply food products across the nation. The government's support also includes increasing the availability of training programs for the workforce in the hospitality and food sectors, improving service quality, and creating job opportunities. These efforts not only encourage local and international food service brands to expand but also create a competitive, sustainable, and innovative environment for the food services market to thrive. This government-backed growth aligns with broader economic diversification goals, driving the Saudi food services sector into a new phase of development.

Surging Tourism Industry Across the Region

The surging tourism industry in Saudi Arabia is significantly driving growth in the food services market. As part of this, as of 2022, the number of international tourists arriving in Saudi Arabia reached approximately 18 million, reflecting a considerable increase from the previous year. The introduction of mega projects like the Red Sea Project, Qiddiya, and NEOM is expected to further boost tourism and hospitality, leading to a rise in the number of food service establishments catering to both local and international visitors. The influx of tourists creates opportunities for international and local food service brands to open new outlets, especially in tourist hotspots, luxury resorts, airports, and shopping malls. Tourism-driven events, such as religious pilgrimages to Mecca and Medina, along with cultural festivals, also increase the demand for diverse dining options that can cater to a wide range of tastes and dietary requirements. Also, the food services market is benefiting from the growing trend of culinary tourism, where tourists seek out authentic local and international food experiences. As food services evolve to offer more variety and higher-quality options, the industry is capitalizing on the rising demand for unique and memorable dining experiences. Also, the expansion of food delivery services, driven by the tourism influx, provides more convenience for tourists and helps boost the market's growth. Hence, the rapid growth of the tourism industry in Saudi Arabia is a key driver of the food services market, creating opportunities for both local and international foodservice brands, enhancing dining options, and contributing to economic diversification.

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Key Market Challenges

Supply Chain Complexities

Supply chain complexities present a significant challenge to the Saudi Arabia food services market. The reliance on both local and international suppliers for ingredients creates vulnerabilities in terms of cost and availability. With a high dependency on imports for many raw materials, including fresh produce, meat, and packaged goods, fluctuations in global commodity prices, geopolitical tensions, or logistical disruptions can lead to supply shortages and price increases. This can impact the consistency and quality of food offerings, ultimately affecting customer satisfaction. Also, the country’s vast geographical spread, combined with varying infrastructure quality in rural and remote areas, can create logistical bottlenecks. Ensuring timely deliveries and maintaining food safety standards during transportation, especially for perishable goods, adds another layer of complexity to the supply chain. In addition, the growth of e-commerce and online food delivery services further intensifies demand on the supply chain. The need for quick, efficient, and reliable delivery services, both to restaurants and directly to consumers, requires robust systems, advanced technology, and significant investment in logistics infrastructure. In response to these challenges, many foodservice businesses are investing in better supply chain management practices, such as local sourcing, advanced inventory management, and partnerships with logistics providers, to minimize disruptions and optimize costs. However, navigating these complexities remains an ongoing challenge for the sector.

High Operational Cost

High operational costs pose a significant challenge to the Saudi Arabia food services market, affecting both local and international foodservice businesses. Key factors contributing to these elevated costs include rising labor expenses, particularly due to the country's reliance on expatriate workers, and the ongoing labor reforms that affect wage structures and employment regulations. Also, rent and real estate prices, especially in high-traffic areas like malls, commercial centers, and tourist destinations, can be prohibitively expensive for food service operators. The cost of raw materials also plays a critical role. Many food ingredients, including fresh produce, meats, and specialty items, are imported, and fluctuations in global supply chains, transportation, and currency exchange rates further drive up costs. This dependency on imports makes it harder for businesses to maintain stable prices, especially during global economic disruptions. Utility costs, including electricity and water, also add pressure to operational expenses. The climate in Saudi Arabia means high energy consumption for air conditioning, refrigeration, and food preparation, which can increase operational costs for foodservice establishments. Also, businesses are increasingly investing in technology and digital solutions for operations, online ordering, and delivery systems, which, while essential for staying competitive, require significant upfront investment and ongoing maintenance. To manage these high operational costs, many foodservice businesses are seeking efficiencies through better inventory management, automation, and optimized staffing models. Some are also exploring local sourcing to reduce dependency on imported goods. However, managing these operational challenges remains an ongoing concern for the food services sector in Saudi Arabia.

Key Market Trends

Rising Popularity of Online Payment

The rising popularity of online payment methods is a prominent trend shaping the Saudi Arabia food services market. As a part of this, the Saudi Central Bank (Sama) declared that digital payments accounted for 70% of all retail transactions in Saudi Arabia last year, an increase from 62% in 2022. The number of digital transactions processed via national payment systems rose to 10.8 billion, marking a 24% annual increase. With the growing penetration of smartphones and internet access, consumers are increasingly opting for digital payment solutions that offer convenience, speed, and security. The shift towards online payments is being driven by the widespread use of mobile wallets like Apple Pay, STC Pay, and Mada, as well as other online banking platforms, which have made transactions smoother and faster. This trend is particularly significant in the food delivery segment, where consumers prefer cashless transactions for convenience and safety. The surge in online ordering platforms and food delivery apps, such as Uber Eats and Talabat, is contributing to the widespread adoption of these payment methods. Also, many consumers are now looking for flexible, multiple payment options, including the ability to use credit/debit cards, mobile payments, and even loyalty rewards systems for their purchases. For food service businesses, adopting online payment solutions is becoming essential to stay competitive and meet customer expectations. This trend not only simplifies the payment process but also helps in improving operational efficiency, reducing the need for handling cash, and enhancing the customer experience. It also provides businesses with valuable data on consumer preferences, enabling them to tailor marketing strategies and optimize inventory management. As Saudi Arabia continues to embrace digital transformation, the popularity of online payment methods is set to grow, further driving the evolution of the food services market and contributing to its continued growth.

Growing Demand for Plant-Based Food

The rising demand for plant-based food is a significant trend in the Saudi Arabia food services market. As global health and environmental concerns grow, more consumers in Saudi Arabia are seeking plant-based options for health reasons, ethical concerns, and sustainability. This shift is being driven by a growing awareness of the benefits of plant-based diets, such as reduced risk of chronic diseases and lower environmental impact. In response to this demand, food service providers are expanding their menus to include plant-based alternatives, including plant-based meats, dairy substitutes, and vegan-friendly meals. International and local restaurant chains are introducing these options to cater to a broader consumer base, particularly among younger generations, expatriates, and those with dietary preferences or restrictions. Also, the growing trend of flexitarianism—where individuals reduce, but don’t eliminate, animal-based products—is further fuelling the adoption of plant-based offerings. This trend is also supported by Saudi Arabia’s Vision 2030, which emphasizes health and sustainability, prompting more foodservice businesses to innovate and align with global food trends. The increasing availability of plant-based products in grocery stores, coupled with the growth of vegan and vegetarian dining establishments, indicates that the demand for plant-based food will continue to rise in the Saudi food services market.

Rising Demand for Fusion Cuisine

The rising demand for fusion cuisine is a notable trend in the Saudi Arabia food services market, reflecting the evolving tastes and culinary preferences of consumers. Fusion cuisine, which combines elements of different culinary traditions to create innovative and unique dishes, is becoming increasingly popular among Saudi consumers, particularly the younger demographic and expatriates. This trend is driven by a growing interest in diverse food experiences and a desire to explore global flavors while retaining local cultural elements. Fusion dishes offer a creative way to cater to the diverse and multicultural population in Saudi Arabia, where traditional Arabian flavors blend seamlessly with international influences like Asian, Western, and Mediterranean cuisines. Restaurants and foodservice establishments are leveraging this trend by offering unique, Instagram-worthy dishes that appeal to the adventurous food lover. For example, dishes that combine traditional Arabic spices with Western ingredients or Asian cooking techniques are gaining traction. Also, the rise of fusion cuisine aligns with the broader trend of health-conscious dining, where restaurants are experimenting with healthier alternatives within fusion dishes, such as plant-based versions of traditional recipes. This trend is also being driven by the country's growing food tourism sector, which attracts international visitors looking for both authentic and innovative dining experiences. As fusion cuisine continues to gain popularity, Saudi foodservice businesses are increasingly focusing on culinary innovation and menu diversification to cater to evolving consumer preferences. This trend not only enhances the variety available to consumers but also drives market differentiation, as restaurants seek to stand out by offering unique, high-quality fusion dining experiences.

Segmental Insights

Type Insights

Full-Service Restaurants dominated the Saudi Arabia Food Services market, owing to their broad appeal and ability to offer diverse dining experiences. These establishments cater to both local and international consumers, offering a variety of cuisines and high-quality service in a comfortable, often upscale environment. FSRs are especially popular among families and business groups, as they provide a combination of food, ambiance, and social experience. The growth of the middle class, rising disposable incomes, and changing dining habits have contributed to the dominance of FSRs. Also, as Saudi Arabia’s tourism sector expands, FSRs have capitalized on the demand from both local and international tourists seeking high-quality dining experiences. The continued expansion of global restaurant chains, as well as the growth of premium and fine-dining segments, further supports the strong position of full-service restaurants in the market. While the quick-service and fast-casual segments are growing, full-service restaurants remain a key player, with an emphasis on providing personalized, high-end dining experiences that meet the evolving preferences of a diverse and affluent consumer base.

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Regional Insights

Northern & Central dominated the Saudi Arabia Food Services market, due to their high population density, economic activity, and tourism potential. Central Saudi Arabia, which includes Riyadh, the capital city, is the hub of business, government, and culture, attracting a significant portion of both residents and international visitors. This region has seen a surge in commercial developments, shopping malls, hotels, and restaurants, which have boosted demand for diverse food services, from fine dining to quick-service options. The Northern region, home to key cities like Al-Ula and Tabuk, is gaining prominence due to increased investment in tourism and infrastructure, driven by Saudi Arabia's Vision 2030 initiatives. Both regions benefit from a concentration of affluent consumers, expatriates, and tourists, making them prime markets for food service operators looking to expand. These areas also host international food chains and local dining establishments, contributing to the overall growth and dynamism of the Saudi food services market.

Recent Developments

• In October 2024, the well-known Saudi Arabian fast food chain AlBaik is preparing to make its long-anticipated expansion into the Pakistani market. This initiative is in line with the objectives of Saudi Vision 2030 to enhance exports of national expertise and broaden global trade. This MoU investigates the potential for a strategic partnership aimed at establishing and running AlBaik restaurants in Pakistan, as part of the company’s growth strategy.
• In October 2024, Pizza Hut, in collaboration with Americana Restaurants, launched its first inclusive restaurant in Saudi Arabia. This establishment employs staff members with hearing and speech impairments, while senior team members are trained in sign language to provide necessary support. As part of its long-term commitment to inclusivity, Pizza Hut will continue to work closely with local organizations and, with the backing of the government, ensure that future locations are accessible to all individuals.
• In February 2023, Talabat and Coca-Cola have formed a strategic partnership to assist local restaurants in boosting sales and enhancing their customer offerings. The partnership was officially finalized during a signing ceremony held at the Dusit Thani Hotel in New Cairo. Over the course of this one-year collaboration, select restaurants on the Talabat app will offer exclusive deals funded by Coca-Cola. The beverage giant will also support these restaurants in enhancing their app presence and invest in marketing initiatives aimed at increasing brand visibility and driving sales on the platform.

Key Market Players  

• Olayan Saudi Holding Company
• Alamar Foods Company
• McDonald’s
• Herfy Food Services Company
• Shawaya House Company
• Tanmiah Food Company
• Starbucks Coffee Company
• Americana Restaurants International Plc
• Deli & Meal LLC
• D.ream international

Report Scope:

In this report, the Saudi Arabia Food Services Market has been segmented into the following categories, in addition to the industry trends which have also been detailed below:

•   Saudi Arabia Food Services Market, By Type:

o   Full-Service Restaurants

o   Quick Service Restaurants

o   Others

• Saudi Arabia Food Services Market, By Ownership:

o   Standalone Outlets

o   Chained Outlets

• Saudi Arabia Food Services Market, By Brands:

o   Domestic

o   International

• Saudi Arabia Food Services Market, By Region:

o   Eastern

o   Western

o   Northern & Central

o   Southern

Competitive Landscape

Company Profiles: Detailed analysis of the major companies presents in the Saudi Arabia Food Services Market.

Available Customizations:

Saudi Arabia Food Services Market report with the given market data, TechSci Research offers customizations according to a company's specific needs. The following customization options are available for the report:

Company Information

• Detailed analysis and profiling of additional market players (up to five).

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