By Elizabeth Broomhall
Growth will be driven by demand for hamburgers and sweets from young affluent Saudis
Saudi Arabia’s fast food market is expected reach a value of $4.5bn in the next three years, driven by high demand among young, affluent citizens, according to a report by Euromonitor.
Restaurant chains providing hamburgers and popular deserts will see the biggest surge in sales, accounting for nearly 20 percent of food service transactions in the Kingdom by 2015, the market research firm said.
“Fast food outlets have become important social spaces for a growing cohort of Saudi young people,” said Michael Schaefer, head of consumer foodservice research at Euromonitor.
“Future expansion will be driven by those operators which offer a combination of indulgence and inviting, comfortable outlets; with hamburgers, ice cream, and sweet baked goods all in high demand.”
Saudi Arabia along with the rest of the Gulf has seen a surge in fast food chains entering the market in recent years, as international brands seek to bolster their global revenues amid increased competition in their domestic markets.
Franchise consultants say they have been bombarded with enquiries especially from mid-sized firms eyeing opportunities to open tens of stores around the region.
New Zealand fast food chain Burger Fuel said in December it planned to open another 12 stores across the Middle East in the near future, after regional sales grew by 47.29 percent to hit $2m, boosted by outlets in Dubai and Saudi Arabia.
Tim Hortons, Canada’s largest restaurant chain, also announced plans to roll out 120 stores in the GCC over the next five years, whilst Smashburger said it had signed agreements for 17 stores in Kuwait, Bahrain and Saudi Arabia.
Other brands with regional expansion in the pipeline include US ‘fast casual’ chains, such as Which Wich, Spicy Pickle and Dressed.