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The Saudi Arabia food retail market size is forecast to increase by USD 16.37 billion, at a CAGR of 5.67% between 2023 and 2028.
The several factors play a crucial role in the market's growth, such as the expansion of hypermarkets and supermarkets in Saudi Arabia, the growing e-commerce industry in Saudi Arabia, and the increasing investment in the food industry in Saudi Arabia. The report provides market size, historical data spanning from 2018 - 2022, and future projections, all presented in terms of value in USD billion for each of the mentioned segments.
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Our researchers analyzed the data with 2023 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.
One of the key factors driving the market growth is the increasing investment in food industry in Saudi Arabia. Saudi Arabia has a rapidly increasing population, which fuels the demand for food products. In addition, the Saudi government has implemented various initiatives to support the food industry, comprising investments in agricultural development, food processing infrastructure, and food security programs. For instance, Saudi Arabia is expecting to gain investments of around USD 18 billion to USD 20 billion in the food industry by 2035.
Moreover, these initiatives aim to reduce dependency on food imports, stimulate domestic food production, and create employment opportunities in the sector. In addition, both domestic and international companies have invested in the food industry in Saudi Arabia, leading to the expansion of food processing facilities, retail outlets, and food service establishments. Hence, such factors are positively impacting the market. Therefore, it is expected to drive the regional market growth during the forecast period.
A key factor shaping the market growth is the rising growth of tourism and hospitality sector. As per the Saudi Press Agency (SPA), in 2023, Saudi Arabia ranked second globally in tourist arrival. In addition, tourism in Saudi Arabia booms with a 58% growth in 2023 in tourist arrivals compared with the same period in 2019. Furthermore, as the tourism industry grows, there is a corresponding increase in the number of visitors to Saudi Arabia.
Moreover, these tourists require food and beverage options during their stay, creating a surge in demand for dining establishments, cafes, and food retail outlets. In addition, tourists visiting Saudi Arabia often seek out diverse culinary experiences, including traditional Saudi cuisine, as well as international and fusion cuisines. Furthermore, this high demand for a variety of food options drives the growth of the food retail sector, encouraging the establishment of new restaurants, cafes, and specialty food shops. hence, such factors are driving the market growth during the forecast period.
Changing consumer preferences in Saudi Arabia are one of the key challenges hindering the market growth. The changing consumer preferences in Saudi Arabia is influenced by factors including health consciousness, sustainability, and convenience,can pose as major retailers in meeting shifting demands. In addition, maintaining consistent quality across a wide range of food products is a challenge for retailers, particularly for perishable items such as fresh produce, meat, and dairy.
Moreover, implementing robust quality control measures, monitoring product freshness, and minimizing waste are essential for preserving product quality and customer satisfaction. In addition, the Saudi Arabian population prefers fresh, homemade meals prepared with locally sourced ingredients. Furthermore, there is a strong cultural preference for fresh and unprocessed foods, including fruits, vegetables, grains, and meats. Hence, such factors are hindering the regional market growth during the forecast period.
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 report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their market growth analysis strategies.
Customer Landscape
Companies are implementing various strategies, such as strategic alliances, 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 the customer satisfaction.
The market research and growth report also includes detailed analyses of the competitive landscape of the market and information about 20 market companies, including:
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.
The offline segment is estimated to witness significant growth during the forecast period. Saudi Arabian consumers often emphasize traditional shopping experiences, comprising visiting physical stores to purchase groceries and food items. In addition, the cultural significance of traditional markets (souks) and local grocery stores remains strong, contributing to the growth of offline food retail. Furthermore, many consumers prefer to personally select fresh produce, meats, and other perishable items such as fruits and vegetables, which is more easily done through offline shopping.
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The offline segment was the largest segment and was valued at USD 38.59 billion in 2018. Moreover, physical stores allow consumers to assess the quality, freshness, and appearance of products before making a purchase. In addition, as more people move to cities and urban areas, the demand for large-format retail stores such as hypermarkets increases to cater to the needs of urban consumers. Furthermore, the opening of new hypermarkets is often driven by competition and market dynamics as retailers seek to expand their footprint and capture a larger share of the market. Hence, such factors are fuelling the growth of this segment which in turn drives the market growth during the forecast period.
The market report forecasts market growth by revenue and provides an analysis of the latest trends and growth opportunities from 2018 to 2028.
Market Scope |
|
Report Coverage |
Details |
Page number |
150 |
Base year |
2023 |
Historic period |
2018 - 2022 |
Forecast period |
2024-2028 |
Growth momentum & CAGR |
Accelerate at a CAGR of 5.67% |
Market growth 2024-2028 |
USD 16.37 billion |
Market structure |
Fragmented |
YoY growth 2023-2024(%) |
5.3 |
Regional analysis |
Saudi Arabia |
Performing market contribution |
Middle East and Africa at 100% |
Key countries |
Saudi Arabia and MEA |
Competitive landscape |
Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks |
Key companies profiled |
Abdullah Al Othaim Markets Co., Al Dabbagh Group, Al Jazera, Al Raya, AL SADHAN, Amazon.com Inc., Astra Markets, Bindawood Holding, Carrefour SA, Hermas, Jeddah Central Markets Co., Lulu Group International, Manuel Supermarket, Nahada, Nana, One Meem, Savola Group, SPAR Group Inc., Speedy, and Tamimi Markets |
Market dynamics |
Parent market analysis, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, Market condition analysis for the forecast period. |
Customization purview |
If our report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
We can help! Our analysts can customize this market research report to meet your requirements.
1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by Distribution Channel
7 Market Segmentation by Packaging
8 Market Segmentation by Product
9 Customer Landscape
10 Drivers, Challenges, and Trends
11 Vendor Landscape
12 Vendor Analysis
13 Appendix
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