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Foodservice in Saudi Arabia to 2016

“Saudi Arabian Foodservice: The Future of Foodservice in Saudi Arabia to 2016” provides a top-level overview and detailed market, channel, and company-specific insights into the operating environment for foodservice companies. It is an essential tool for companies active across the Saudi Arabian foodservice value chain, and for new companies considering entering the market.

A steady economic growth is one of the major growth drivers for the foodservice industry in Saudi Arabia. GDP growth, accompanied with a steady rise in disposable income, has been a major driving factor in the growth of the Saudi Arabian foodservice industry. A reduction in the inflation rate and public debt has led to higher footfall and increased consumer spending.

Unemployment remains a major issue, with a high number of unemployed in the female and youth populations raising concerns in the country; due to this, less people in the country prefer to eat out or can afford to spend on western fast food, which therefore affects foodservice sales.

Foodservice operators in the country are attracted to the huge growth potential in the country, with inbound visitor arrivals forecast to grow from 13 million in 2010 to 15.8 million by 2014, and in order to further boost tourism, the country is focusing its efforts to provide the necessary travel infrastructure. The growing tourism sector is expected to contribute towards the growth of the travel and accommodation industry and consequently the foodservice industry.

The rise in fast-food consumption has contributed to rampant obesity and increased incidences of cardio-vascular disease, diabetes, hypertension, and coronary heart disease, which has encouraged the population to move towards healthier eating, even with respect to convenience food.

Increasing health awareness has encouraged the people of Saudi Arabia to turn towards natural and organic products; however, the availability of organic products remains an issue in the country, with most organic products being imported from the US and Europe.

Fast-food outlets have become important social spaces for a growing cohort of Saudi young people and are a huge business in Saudi Arabia; eating out has become a key entertainment option for Saudis of all ages, which has created lucrative opportunities for restaurants while bringing convenience and standardization into people's lives.

Social media sites act as a platform for foodservice operators and marketers to advertise their products and connect with a larger consumer base at a more personal level.

The popularity of fusion-food on the menu is expected to grow in South Arabia because of an increasingly growing multi-cultural society due to the presence of a large number of expatriates in the country. Foodservice operators offer a blend of traditional and modern cuisine on their menus.

Saudi Arabia's internet penetration rate increased significantly over the past decade, from 5% in 2001 to 47.5% in 2011, with 14 million internet subscribers as of 2011. Realizing the increased level of internet penetration and the eating-out trend of Saudi consumers, many foodservice providers are using this knowledge to their advantage.

According to the Communications and Information Technology Commission (CITC), the total number of mobile subscriptions grew to 54.3 million at the end of the first quarter of 2012, with a penetration rate of 188.5%. Smartphone penetration was also extremely high in Saudi Arabia, as 60% of mobile phone users had smartphones as of the first quarter 2012, and the growing importance of smartphones and tablets has led to the development of various software applications that provide facilities such as online restaurant finders and online ordering.

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by S. C.
15 october 2012, World News > Asia