US fast food brands to dominate UAE market

American chains to lead swell of Gulf state’s restaurant market to $780m in next four years
US fast food brands to dominate UAE market
Darden opened its first Red Lobster outlet in the Middle East in July
By Shane McGinley
Tue 29 Nov 2011 02:55 PM

The UAE restaurant market is set to grow 30 percent to $780m
in the next four years and will be dominated by American-style fast food
brands, an industry expert has said.

Branded table-service restaurants generate about $600m a
year in the UAE, a number set to swell to $780 by 2015, said Stefan Breg,
founder of Tribe Restaurant Creators in Abu Dhabi.

In a poll of dining outlets in the Gulf state, Tribe found
American brands comprised up to 47 percent of food and beverage offers in Dubai

Homegrown restaurants, by comparison, made up between 8-17

“Americans are good at producing formulaic food and are
adept at franchising,” Berg told Arabian Business’ sister title Hotelier Middle

US-based chains are set to open some 250 outlets across the
Middle East over the next decade, as profits slow in their domestic markets. Brands
including Shake Shack, Red Lobster and Texas Roadhouse have all debuted in the
UAE market in recent months, under tie-ups with local firms.

“The American market went soft two to three years ago, which
made franchise deals in the Middle East all of a sudden look very attractive,”
Berg said.

TGI Friday’s, PF Chang’s China Bistro and Applebee’s, owned
by DineEquity, are growing in the region by putting new spins on their menu
options, while rivals Smashburger and Darden Restaurants are just getting
started, braving the Arab Spring political turmoil to open locations in Egypt,
Saudi Arabia and the UAE.

Friday’s, owned by Carlson Cos, started doing business in
Dubai in 1996 and has grown to 31 restaurants in the region. The company said
last year it plans to open an additional 30 locations in the Middle East in the
next five years.

Darden, the biggest casual-dining operator in the US, opened
its first Red Lobster in the Dubai Mall in July and will open two more
restaurants in Kuwait City in 2012. Last year, the company committed to opening
at least 60 Red Lobster, Olive Garden and LongHorn Steakhouse chains in the
region in five years.

Smashburger, with about 120 locations in the US, will open
its first international store in Kuwait next year. The Denver-based chain has
agreed to open 37 stores in the Middle East and is getting rid of
applewood-smoked bacon and making other menu tweaks.

The growth in restaurant brands has spilled over into other
areas of the food and beverage market, said Breg. Franchise brands from Europe
were virtually non-existent in the GCC before the launch of Costa Coffee into
the market in 1999.

Between 2000 and 2007, The region saw the arrival of brands
like Yo!Sushi, Gourmet Burger Kitchen, Wagamamas and Wrapid, among others.

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.

Breg said the number of homegrown restaurants brands was set
to increase, as larger retailers look to bolster their F&B offerings.

“The pipeline for local concepts looks good,” he said. “We… 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.”

* With Bloomberg

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