Saudi Arabia Food Retail Market Analysis - Size and Forecast 2025-2029

Saudi Arabia Food Retail Market Size 2025-2029

The Saudi Arabia food retail market size is forecast to increase by USD 18.05 billion, at a CAGR of 5.9% between 2024 and 2029.

• The Saudi Arabian food retail market is experiencing steady growth, driven by shifting consumer preferences and advancements in technology. Demand for healthier, sustainable options like organic and plant-based foods reflects changing buying habits, while e-commerce and digital tools are reshaping how businesses reach customers and streamline operations. Additionally, digital advancements are also shaping the industry, as retailers adopt technologies such as mobile applications, online ordering, and contactless payments to enhance the shopping experience and optimize their operations.
• This report delivers actionable insights, including market size, growth forecasts through 2029, and analysis of key segments like grocery and specialty retail. It highlights the rise of online food retail as a major trend, alongside challenges such as intense competition among local and multinational players.
• For businesses aiming to refine strategies, enhance client engagement, or optimize supply chains, this report offers a clear view of the global food retail landscape. Its data-driven approach helps companies navigate evolving trends and tackle competitive pressures to stay ahead in a dynamic market

What will be the Size of the market During the Forecast Period?

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The food retail market continues to evolve, with online-grocery sales experiencing significant growth due to consumer polarization towards convenience and contactless shopping. Supermarkets, including Whole Foods, adapt by implementing delivery models such as curbside pickup and direct-to-door services. The food cupboard segment, characterized by small, convenience stores, also thrives in urban areas. Advanced technologies, sustainable practices, and strategic acquisitions are key strategies for market differentiation. Environmental regulations and consumer preferences for healthier foods, especially among Generation Z and millennials, influence product offerings. The beverages segment and online delivery channel further expand, driven by consumer tech adoption and economic recovery. Grocery CEOs partner with merchandising and category management teams to optimize strategy, utilizing senior partners in consumer tech and store operations for advanced analytics and consumer behavior insights. Prices and budgets remain value-conscious, with a focus on sustainability and e-commerce.

How is this market segmented and which is the largest segment?

The market research report provides comprehensive data (region-wise segment analysis), with forecasts and estimates in "USD billion" for the period 2025-2029, as well as historical data from 2019-2023 for the following segments.

• End-user
  • Offline
  • Online
• Packaging
  • Flexible
  • Semi-rigid
  • Rigid
• Geography
  • Saudi Arabia

By End-user Insights

The offline segment is estimated to witness significant growth during the forecast period. In Saudi Arabia, traditional shopping experiences continue to hold significance for consumers when it comes to purchasing groceries and food items. The cultural appeal of local markets (souks) and brick-and-mortar grocery stores persists, fueling the expansion of offline food retail. Consumers prefer this shopping method to personally inspect the freshness, quality, and appearance of perishable goods, such as fruits, vegetables, and meats. As urbanization increases, the demand for large-format retail stores like hypermarkets rises to accommodate the needs of urban consumers. This trend is driven by the convenience and wide selection these stores offer. Despite the rise of e-commerce, physical stores remain a preferred choice for many value-conscious consumers seeking a more personalized shopping experience.

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Market Dynamics

Our researchers analyzed the data with 2024 as the base year, along with the key drivers, trends, and challenges. A holistic analysis of drivers will help companies refine their marketing strategies to gain a competitive advantage.

What are the key market drivers for the Saudi Arabia Food Retail industry?

• The expansion of hypermarkets and supermarkets in Saudi Arabia is the key driver of the market. The online grocery sales sector is experiencing significant growth due to consumer polarization towards convenience and sustainability. With the rise of millennials and Generation Z consumers, there is a growing demand for advanced technologies such as curbside pickup, direct-to-door delivery, and sustainable practices in the supermarket business. Environmental regulations and consumer behavior are driving the supermarket industry to adopt advanced analytics and merchandising strategies. The beverages segment is a notable area of focus, with consumers increasingly opting for eco-friendly and sustainable packaging.
• The online delivery channel has become a preferred choice for consumers, especially during the economic recovery and inflation periods, due to the availability of a wide range of products and stated behavior indicating convenience and price sensitivity. Hema stores in China, for example, have been successful in implementing advanced technologies such as scan-and-go and AI-powered store operations to enhance the shopping experience. Consumers are increasingly concerned with sustainability and environmental issues, leading to a growing preference for merchandise with eco-friendly labels.

What are the market trends shaping the Saudi Arabia Food Retail industry?

• Strong digitalization in food retail in Saudi Arabia is the upcoming trend In the market. The food retail market is undergoing significant transformation, driven by the rise of online grocery and shifting consumer preferences. Consumer polarization, with both millennials and Generation Z consumers prioritizing convenience, value, and sustainability, has led supermarkets to adapt their strategies. Whole Foods, for instance, has partnered with Amazon to offer Prime members discounts and perks, while implementing advanced technologies like curbside pickup and direct-to-door delivery models. Hema stores in China, which combine online and offline shopping experiences, have also gained popularity. Advanced technologies, such as consumer tech, merchandising strategies, and advanced analytics, are being leveraged to understand consumer behavior and optimize pricing and budgets for value-conscious shoppers.
• Sustainable practices, including the availability of healthier foods and adherence to environmental regulations, are increasingly important to consumers. Strategic acquisitions by e-commerce giants and traditional retailers further underscore the market's evolution. The economic recovery and inflation have also influenced consumer spending patterns, making it crucial for food retailers to stay agile and responsive to changing market dynamics. Beverage segment sales through the online delivery channel have seen significant growth, reflecting the trend towards convenience and home delivery. Overall, the food retail market is poised for continued innovation and disruption, as retailers navigate the complex interplay of consumer preferences, technological advancements, and economic realities.

What challenges does Saudi Arabia Food Retail Market face?

• Stringent regulations on food products in Saudi Arabia is a key challenge affecting the market growth. The food retail market is experiencing significant shifts due to the rise of online-grocery sales and changing consumer preferences. According to recent studies, consumer polarization is driving the supermarket business towards new delivery models, such as curbside pickup and direct-to-door delivery. Companies are leading the charge in implementing advanced technologies, sustainable practices, and strategic acquisitions to meet the demands of value-conscious, health-conscious, and environmentally-aware consumers. Generation Z consumers and millennials are increasingly turning to the online delivery channel for their grocery needs, citing convenience, affordability, and sustainability as key factors.
• Advanced analytics and consumer tech are playing a significant role in merchandising and strategy, allowing retailers to better understand consumer behavior, prices, and budgets. Environmental regulations continue to impact the food retail industry, with a growing emphasis on sustainability and e-commerce's economic recovery from inflation and the availability of products. Indonesian consumers, in particular, are stated to prioritize sustainable practices and affordability In their grocery purchasing decisions. Beverages segment is also experiencing growth In the online sales channel.

Exclusive Customer Landscape

The market forecasting report includes the adoption lifecycle of the market, covering from the innovator's stage to the laggard's stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the market report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their market growth analysis strategies.

Customer Landscape

Key Companies & Market Insights

Companies are implementing various strategies, such as strategic alliances, market forecast, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence In the market.

Abdullah Al Othaim Markets Co: The company offers food retail with the highest standards of quality and food safety and against affordable prices on time, in a manner that achieves the objectives and customer satisfaction.

The market research and growth report includes detailed analyses of the competitive landscape of the market and information about key companies, including:

• Al Dabbagh Group
• Aljazera
• Al Raya Supermarket
• AL SADHAN
• Amazon.com Inc.
• Astra Food Co.
• Bindawood Holding
• Carrefour SA
• Hermas Food & Beverage
• Jeddah Central Markets Co.
• Lulu Group International
• Manuel Supermarket
• Nana
• One Meem
• Savola Group
• SPAR Group Inc.
• Speedy
• Tamimi Markets

Qualitative and quantitative analysis of companies has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize companies as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize companies as dominant, leading, strong, tentative, and weak.

Research Analyst Overview

The food retail market continues to evolve, shaped by various factors that influence consumer behavior and business strategies. In this analysis, we delve into the key market trends and dynamics shaping the supermarket business. Consumer preferences have become increasingly diverse, with a growing emphasis on healthier food options and sustainable practices. Advanced technologies, including IoT sensors, RFID, and AI-driven analytics, are being employed in food retail stores to boost operational efficiency, ensure product quality, and enhance the overall shopping experience. This trend is particularly noticeable among younger generations, including millennials and Generation Z consumers. These consumers are more likely to prioritize value, convenience, and transparency when making purchasing decisions. Advanced technologies have become integral to the food retail landscape, with online delivery channels gaining significant traction.

Moreover, delivery models, such as curbside pickup and direct-to-door, have become popular alternatives to traditional in-store shopping. These technologies not only cater to the convenience-driven consumer but also enable retailers to offer a more personalized shopping experience. Strategic acquisitions and partnerships have become essential for supermarkets looking to expand their offerings and reach new customer segments. For instance, some retailers have partnered with consumer tech companies to enhance their digital capabilities, while others have acquired specialty stores to broaden their product range. Environmental regulations also play a crucial role In the food retail market. Retailers are increasingly focusing on sustainable practices to meet evolving consumer expectations and comply with regulatory requirements.

Furthermore, this includes reducing food waste, using renewable energy sources, and implementing circular business models. Consumer behavior is another critical factor influencing the food retail market. Prices and budgets remain important considerations for value-conscious consumers, particularly In the current economic recovery environment. However, inflation and availability of products can impact pricing strategies, necessitating a dynamic approach to merchandising and supply chain management. The beverages segment is another area of growth In the food retail market. Consumers are increasingly seeking healthier, more functional beverage options, driving innovation and investment in this category. Advanced analytics and consumer behavior insights are essential tools for retailers looking to capitalize on these trends and meet evolving consumer demands.

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What are the Key Data Covered in this Market Research and Growth Report?

• CAGR of the market during the forecast period
• Detailed information on factors that will drive the market growth and forecasting between 2025 and 2029
• Precise estimation of the size of the market and its contribution of the market in focus to the parent market
• Accurate predictions about upcoming market growth and trends and changes in consumer behaviour
• Growth of the market across Saudi Arabia
• Thorough analysis of the market's competitive landscape and detailed information about companies
• Comprehensive analysis of factors that will challenge the growth of market companies

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