Saudi Arabia Cafés Market to Grow at a CAGR of 10.6% during Forecast Period

Published | 20 June 2022

Saudi Arabia Cafés Market is growing at a high CAGR because of the growing urban population base, massive product awareness, and changing societal norms that are creating opportunities for restaurant and café owners across the country by meeting the demand for high-quality food as well as changing tastes and preferences due to western influence…

A recent study conducted by the strategic consulting and market research firm, BlueWeave Consulting, revealed that the Saudi Arabia Cafés Market was worth USD 6.27 billion in the year 2021. The market is projected to grow at a CAGR of 10.6%, earning revenues of around USD 12.64 billion by the end of 2028. The Saudi Arabia Cafés Market is booming because of the growing urban population base, massive product awareness, and changing societal norms that are creating opportunities for restaurant and café owners across the country by meeting the demand for high-quality food as well as changing tastes and preferences due to western influence. In addition, tourism industry in Saudi Arabia is undergoing a drastic change owing to the efforts of private and public sector to develop their tourist base and the purpose of visiting Saudi Arabia. Therefore, the number of tourists visiting the country is increasing, which is boosting domestic tourism. Hence, impacting the demand of cafés in the country leading to the growth of the Saudi Arabia Cafés Market during the forecast period.

Expanding Urbanization & Disposable incomes, Tourism Industry and Internet Penetration is Driving Saudi Arabia Cafés Market

Due to rapid urbanization and disposable income, the Saudi Arabia Cafés Market is growing at a rapid pace in recent years and is expected to grow further during the forecast period. The growing tourism industry and rising youth population are expected to be the major factors driving the Saudi Arabia Cafés Market. As the growing youth population prefers fast food and likes casual hangouts the demand for cafés is set to rise boosting the growth of the Saudi Arabia Cafés Market.  The growing demand of cafés is influencing brands in investing on expansion activities resulting in rising chain restaurants in the country. In March 2022, AG Café, the master franchisee of Canadian restaurant chain Tim Hortons in the Middle East, announced that it plans to expand the brand’s presence in Saudi Arabia by reaching to more than 200 coffee shops by 2024.

The tourism industry in Saudi Arabia is undergoing a drastic change owing to the efforts of private and public sector to develop their tourist base and the purpose of visiting Saudi Arabia. Therefore, the number of tourists visiting the country is increasing, which is boosting domestic tourism. In 2019, there was an increase of 10% from the past in the number of tourists that visited the country. Many visited for pilgrimage purpose and the increasing number of foreign workers visiting the country has boosted the tourism industry, resulting in the growth of the Saudi Arabia Cafés Market during the forecast period.

Also, during the pandemic due to the government's strict regulations, all cafés were closed, forcing them to shift to home delivery services. The rising use of online café services by the younger population as they have accessibility to internet facility and show major usage of internet has been a major driver for the growth of Saudi Arabia Cafés Market during the forecast period. The online platform is growing considerably due to its convenience to order from your own place and is likely to grow further during the forecast period. But lack of trust while making payments via digital platforms is responsible for hampering its reasonable growth. However, the online channel is projected to witness significant growth opportunities owing to contact-less buying or delivery and cashless transactions options during the forecast period.

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Segmental Coverage

Saudi Arabia Cafés Market is segmented into By Category (Bakery, (Breads, Cookies, Cakes, Others), Confectionery, (Chocolates, Dry Fruits, Others), Beverages (Coffee, Tea, Shakes, Others), Others; By Type (Seating Café, Take-Away Café); By Ownership (Chain Restaurants, Standalone Outlets); and By Sales Channel (Retail, Online)

Based on Ownership, the Saudi Arabia Cafés Market is segmented into Chain Restaurants, Standalone Outlets. The Chain Outlets of cafés has accounted for the majority share in the Saudi Arabia Cafés Market. With the growing popularity of fast foods and casual hangouts amongst the growing youth population, chained outlets are growing at a fast pace. Chain Outlets are increasing in number with international brands making expansions like McDonald’s, KFC, Applebee’s, Chilis, Dominos, etc. marking their presence in the country. Furthermore, the global chains have followed the strategy of customization and localization through intelligent modifications in their menus to cater as per the changing taste preferences of its consumers.

Regional Insights

Geographically, the Saudi Arabia Cafés Market is segmented into Western, Central, Eastern, Southern and Northern region. The Western region segment accounts to hold the largest share in the market owing to the well-established chain restaurants and rising disposable income. This trend is followed by the central region and is expected to maintain its dominance in the forecast period due to changing lifestyle and preferences, rising per capita income, and growing population. Hence, all these factors are likely to increase the demand for cafés resulting in expansion of brands and impacting the growth of the Saudi Arabia Cafés Market during the forecast period.  

Impact of COVID-19 on Saudi Arabia Cafés Market

During the COVID-19 pandemic, cafés were negatively impacted due to lockdown measures. This is because many chained café outlets in Saudi Arabia faced temporary closures which greatly affected the business. Also, there was shortage of raw materials and labor due to complete lockdown. As social distancing was the norm at the time so café to be operational even after the lifting of national lockdown restrictions was next to impossible. And a significant number of outlets also closed permanently due to difficult economic conditions which they faced and found it impossible to sustain any further. However, the increasing use of online platform to order food from cafés from the convenience of home saw an upsurge and is expected to boost the demand for cafés influencing the growth of the Saudi Arabia Cafés Market during the forecast period.   

Competitive Landscape

Key players operating in Saudi Arabia Cafés Market are Sulalat Coffee, Applebee’s, Bateel, Starbucks, Elixir Bunn Coffee Roasters, T.G.I. Friday’s, Brew92, Chili’s, Bafarat Café, Java Time, Sizzler House, dr.CAFE COFFEE, Café Magad, Fuddruckers, Boho Café, Outback Steakhouse, Derby Coffee International and other prominent players

The Saudi Arabia Cafés Market is highly consolidated with the presence of several brands of chain restaurants in the country. The market leaders retain their supremacy by huge investments in expansion of their chain of restaurants, incorporating cutting-edge technology into their goods, and providing high-quality food to its customers. Various tactics, including strategic alliances, agreements, mergers, and partnerships, are used.

Don’t miss the business opportunity in the Saudi Arabia Cafés Market. Consult our analysts to gain crucial insights and facilitate your business growth.

The in-depth analysis of the report provides information about growth potential, upcoming trends, and statistics of the Saudi Arabia Cafés Market. It also highlights the factors driving forecasts of total market size. The report promises to provide recent technology trends in the Saudi Arabia Cafés Market and industry insights to help decision-makers make sound strategic decisions. Furthermore, the report also analyzes the growth drivers, challenges, and competitive dynamics of the market.

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