More closures seen in tougher UAE F&B market

Industry expert says more restaurants may shut as competition increases in the UAE
By Andy Sambidge
Fri 27 May 2011 01:21 PM

A tougher food and drinks market means more restaurant closures are to be expected in the UAE, according to Stefan Breg of F&B consultancy Tribe.

Recent closures of Dubai restaurants such as Rive Gauche at The Address Dubai Marina, Empire at The Monarch hotel and Tang at Le Meridien Mina Seyahi were signs of a more competitive climate, said Breg in comments published by Hotelier Middle East.

“Up until 2008, the UAE had grown accustomed to enjoying great returns from restaurant investments. Over the last few years, the market has toughened; a combination of both a leap in competition and to a lesser degree, reduced demand. I don’t think these closures represent a major increase in closures,” added Breg.

“We should even expect more closures resulting from ‘churn’ as leases expire in five year old malls and new market entrants surface. In other markets, it's often how the restaurant sector evolves and the strongest survive."

The UAE F&B scene is well set-up to survive the current conditions, added Breg.

“In other parts of the world, it is perfectly normal for failures in year one to exceed 70-80 percent of openings. Also, the vast majority of restaurants here are privately owned rather than publicly quoted and therefore can often survive as part of a portfolio of other businesses such as food and clothing retail.”

UAE retailer BinHendi Enterprises on Wednesday said it is eyeing five new restaurants brands.

The Dubai-based conglomerate, which counts more than 50 brands in its franchise portfolio, said is mulling a string of new food and beverage brands to launch in the Gulf.

Existing BinHendi-run outlets include coffee chain Second Cup, and the restaurants Duck King, Café Havana, China Times and Ruby Tuesday.

“In the F&B business we create our own brands, and at the moment I have five on the drawing board,” Mohi-Din BinHendi, company president said.

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