博鱼体育集团

Riyadh鈥檚 food and beverage scene is thriving with 288,000 sqm of restaurant-led lifestyle retail developments, which include 273 new restaurants, spread across 16 lifestyle retail developments coming to market, since the was announced in 2016.

Faisal Durrani, head of Middle East Research, 博鱼体育集团 Frank, explained: 鈥淭he government鈥檚 vision to transform Riyadh into a new cosmopolitan business hub for the region is bringing into focus the city鈥檚 public realm and lifestyle amenities. These key ingredients that define a city鈥檚 habitability are slowly starting to fall into place in Riyadh. The Kingdom鈥檚 capital is beginning to morph into a foodie鈥檚 treasure trove and we鈥檙e not done yet. Bujairi Terrace at Diriyah Gate will add a further 15,000 sqm of lifestyle retail space to the capital when its 17 restaurants open their doors in 2022.

鈥淭he café scene too is bustling with 40% of new outlets falling into this category, with UWalk becoming the nerve centre of Riyadh鈥檚 café culture, with 53% of outlets dedicated to coffee shops.鈥�

Challenges ahead?

博鱼体育集团 Frank鈥檚 analysis reveals that the growing food & beverage (F&B) scene is being transformed by home-grown local restaurants and cafes.

Durrani added: 鈥淚nternational restaurant brands are yet to arrive in a meaningful way, which is a double-edged sword. 68% of the city鈥檚 new restaurants and cafes are Saudi brands, 21% of which specialise in international cuisine. American food outlets account for 16% of F&B outlets, while Lebanese restaurants are the third most prevalent at 13%. Once news of the soaring demand for high quality restaurants catches the attention of global brands, consumers will benefit from additional options, but international F&B outlets will undoubtedly rival the local outlets in terms of cost, reputation and experience.鈥�

For now, brands such as Magnolia Bakery from the UAE and Urth Caffe from the US have helped position these two countries as the second and third largest sources of restaurant chains, respectively, in Riyadh.

鈥淭his rapid growth is not without its challenges. Some lifestyle retail developments launched in 2016 or 2017 are already being usurped by newer, more modern lifestyle retail destinations, creating challenges for restauranters and landlords alike as vacancy rates in older developments creep up and footfall declines鈥�, Durrani said.

All is however not lost, with retail operators still capable of clawing back market share.

Growing market dynamics 

Pedro Ribeiro, head of retail advisory KSA at 博鱼体育集团 Frank, explained: 鈥淚t is very evident that the International F&B brand鈥檚 not yet operating in the Kingdom need to understand the growing market dynamics that are allowing the local outlets to flourish and expand not just locally, but regionally and globally as well.

International brands must adapt their proposition across the full spectrum to suit demand, both in terms of operational aspects, as well as the actual menu offering itself. It鈥檚 clear that demand for lifestyle retail in the Kingdom of Saudi Arabia is thriving and the key to their overseas鈥� brands success will be in finding the correct formula of both maintaining their international brand identity but adapting it to meet local customer requirements.鈥�