By Stefan Breg
A rise in homegrown restaurants could challenge the US influx, says Stefan Breg
The growth of American food outlets in UAE malls is relentless. There had been some signs of an ‘Arab Spring’ a couple of years back when Mirdif City Centre opened, but since then there’s been a relentless wave of American casual dining: Shake Shack, P.F. Chang’s, Potbelly, Red Lobster, Texas Roadhouse, and pretty soon The Cheesecake Factory.
Bloomberg recently asked Tribe to do an analysis on the major malls in Dubai. We found that brands of American (or perceived as) American origin made up 33-47% of the total F&B offers in the malls. By contrast, Middle Eastern brands made up just 8-17%.
We put it down to a number of factors:
1) Consumers still want ‘Americana’ (apologies to the company of the same name)
2) This consumer demand is driven by nostalgia for the US (possibly ex-students?) and the bombardment of American media
3) Americans are good at producing formulaic food and are adept at franchising
4) The American market went soft two to three years ago, which made franchise deals in the Middle East suddenly look very attractive.
Despite this dominance, there are now signs that Europe is stirring. Franchise brands from Europe were virtually non-existent here until 1999 when the first Costa Coffee outside of the UK arrived in Dubai. Costa has since grown rapidly and added units in Oman, Bahrain, Kuwait, Qatar, Saudi Arabia, Syria, Jordan and Lebanon.
Between 2000 and 2007, we saw the first of more European brands with the arrival of Yo!Sushi, Gourmet Burger Kitchen, Wagamamas and Wrapid, among others.
The boom in mall development in Dubai over the last five years has sparked a growth in European franchises. The new European brands to arrive at Mirdif City Centre included Snog and Tiffinbites.
These brands joined Nordsee, Caffe Nero and more, and there have been more recent high-end European additions to the UAE, including Zuma, Cavalli Club, The Ivy and Hakkasan.
The Far East, Australia and South Africa can also take credit for Jones the Grocer, Social House, Paparoti, Mango Tree, Sumo Salads, Meat Co. and Butcher Grill.
One thing is strikingly common to each of the non-American brands that have arrived in the last few years: innovation.
The new market entrants such as Vapiano, Carluccios, Wrapid, Wagamamas, Cavalli Club, Paparoti and Buddha Bar could all claim to be unique in their field. But there’s no shortage of talent here as shown by locally inspired concepts such as Wild Peeta, More Café, The Noodle House and Japengo.
The pipeline for local concepts looks good and we at Tribe are busier than ever with clients asking us to look beyond American food and explore Indian, Iranian, health food, fish and... Emirati. Watch this space.
(Stefan Breg is the chief worrier of F&B strategy house Tribe Restaurant Creators. The opinions expressed are his own. This column originally appeared in Hotelier Middle East)
No great insights here and some faulty reasoning, in my opinion, as well. Development of retail F&B has been quite normal in Dubai to date and will remain on the typical path... When a locality first becomes an international marketplace, its consumers typically consume foreign brands that they feel "validate" their self-image. That has happened in Dubai. The next and very crucial step comes when Dubai creates its own "home grown" brands and people outside of Dubai consume those to validate their self-image. This has already happened in the travel and real estate markets. This second stage is quite healthy and is currently happening in Korea. (See a recent article at Chosun Ilbo's English site titled "Koreans Pay Dearly for Their Label Addiction". It's nice to see that Koreans are now saying, "Wait a minute, we can do better than that!" and many Korean brands are now gaining huge popularity in the global market. For instance, Love Letter fried chicken is so much better than KFC. :-)
I was stunned by how many American brands were here when i visited. KBS raises some interesting pts but even while I was there, Shake Shack, Texas Roadhouse and Potbelly opened and I didnt see any signs of 'home grown' concepts opening. Local residents said there were plans for more american names, dont get me wrong, it does seem unusual
It is about time that somebody raised the question you raised and I want to thank you for that.
Unhealthy food with unacceptably high calories and artery-clogging fat content with a foreign brand name attached to it is served from fancy restaurants with huge advertisement budgets. They are found in shops in almost every building on a main street, and most malls, too.
The result: people are becoming obese, diabetic, hypertensive and more and more people are dying at a young age. I should know - I'm a practicing GP in Dubai.
Dubai is the no 1 in many things, but soon will have the dubious distinction of being diabetic capital of the word too, if things don't change - and soon.
We shouldn't eat out more than once or twice monthly. We need to make an effort to go for daily walks, to eat healthier, reduce our stress levels and sleep better. This will keep our weight in control. We can change the bleak scenario into a brighter future for Dubai.
Alarming is sometimes an understatement. I have a nephew who is morbidly obese, at high risk of diabetes (both sides of the family) and very 'cranky' (if that can be construed to be hypertensive); all this at an age well before completing first decade. What I also notice ALWAYS is how he HAS to have the latest "Children's meal" toy from any of the major fast food franchises. I cannot remember him NOT having the latest movie release toys from a meals 'offer' in the past 4 years. Which only indicates his dietary habits (probably fast food twice a week?). Obviously the defense used is "he is a growing boy, this is good for him, he will be stronger, etc...", the obvious problem is far too indulgent and ignorant parenting...
To continue with my #4, the Middle East has been a great franchise market for the past 5 to 10 years, not just the last 2 or 3. Brands such as Applebees, Fridays, Chili's, Ruby Tuesday, Tony Romas, Pizza Hut, Burger King, McDonalds, KFC, Hardees, Subway, Starbucks, Caribou Coffee, Pizzeria Uno and more have been around for at least the last 5 years, some as many as 14 years.
A better top 4 would be:
1) American brands tend to offer great tasting food, which may not always be the healthiest because of salt, fat, etc. but its what consumers want.
2) American brands tend to offer large portions for big appetites and because of this there is usually a good "value for money" perception when dining in American restaurants.
3) American brands tend to be more consistent so consumers are more confident that something they ordered at a chain in Orlando or Atlanta will be the same when ordered in Dubai, Jeddah, Kuwait, etc.
4) Service at U.S. restaurants is usually better than other chains.
The top 4 list is just ridiculous. Let's start with number one"
1)Consumers still want "Americana"? When did they not want good brands which in some cases are from America? Number one implies customers wake up and say "I want to eat at an AMERICAN restaurant today"....nope.
2)Nostalgia and American media...and ex-students? WHAT? By media do you mean "marketing?" Nostalgia and ex-students implies locals spent time in the States with these various brands. How does that explain the success of a small brand like Shake Shack which does not even have 30 units in the U.S....nope.
3)Americans are good at franchising....again, what does this mean. Does this mean a burger at Chili's should taste the same in Dallas as it does in Dubai, Jeddah or wherever? Any franchise should be able to do the same so this one does not make a lot of sense either....nope.
4)The American market went soft 2-3 years ago making the Middle East look good. First the WORLD went soft including the Middle East
Yet more fast food from the US of A, yes well once the monthly UAE healthcare bill becomes astronomically unmanageable because of all the side effects, perhaps that will be the time to reconsider carefully.
Is a flood of new restaurants good for the nation's health, or is it all about investment and a full wallet rather than stemming the rise of heart disease, diabetes and bowel related cancers.
From a Ministry of Health point of view it is not all about how its cooked and clean kitchens, it should be about what the ingredients do for or to your body.
Another point which is not mentioned in this very one-sided article is all these American franchises are owned and operated by Middle East companies...so who is to blame for all these American brands being in the malls?
1) The Middle East companies signing these brands. Companies like Al Shaya from Kuwait (Starbucks, PF Changs, Texas Roadhouse, Potbelly, Cheesecake Factory), Americana from Kuwait (Fridays, Krispy Kreme, Taco Bell, Pizza Hut, KFC) and others.
2) The shopping malls who lease space to these brands such as Mall of the Emirates, Deira City Centre, Mirdif City Centre (MAF Group, UAE family), Dubai Mall, Dubai Marina Mall (Emaar, UAE company) and others.
And why do these Middle East companies sign American brands and leases space to them? Money is the answer. These brands will make a profit for Al Shaya, Americana and others. Honestly big retailers pay the lowest rent but rent plus percentage sales deals mean even malls make good money from these brands.
Calm down â€˜anonymousâ€™, the article reports the facts and I gotta say itâ€™s right in many ways.
Re Americana, one word; Coke oh and starbucks, Levis, Apple, Microsoft, Gap...ok thatâ€™s enough now
As anyone who has done business in the US will know, they remain the masters of franchising with a huge proportion of business formats based on using franchising.
It would be great to see more locally inspired food in the malls. Frankly I know thereâ€™s a market for it but the word FATBURGER says it all for me in this discussion
Classic, couldn't agree more. There is no way in the world somebody would get me to eat there.