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Saudi Arabia’s Restaurant Sector Growth Attracts Global Investment

Restaurants in the Riyadh City Boulevard. (Asharq Al-Awsat)
Restaurants in the Riyadh City Boulevard. (Asharq Al-Awsat)
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Saudi Arabia’s Restaurant Sector Growth Attracts Global Investment

Restaurants in the Riyadh City Boulevard. (Asharq Al-Awsat)
Restaurants in the Riyadh City Boulevard. (Asharq Al-Awsat)

The strength of consumer demand in Saudi Arabia’s food and beverage sector makes it an appealing market for international brands. The development of regulations and legislation has created an investment framework that facilitates foreign companies’ expansion and achievement of their goals in the Kingdom.

Point-of-sale operations using “Mada” cards in Saudi Arabia have shown a 13.6 percent annual growth in the restaurant and café sector, increasing from SAR 78 billion ($20.8 billion) in 2022, to SAR 89 billion (%23.7 billion) over the past year. The growth indicates a promising future for the market, which is experiencing strong consumer demand.

Amro Bagedo, the founder and CEO of Kraiv, said: "The continuous and remarkable growth in the food, beverage, and hospitality sector in the Kingdom is driven by the younger generation. Their desire to experience renowned international brands without traveling abroad has created opportunities for stakeholders from the America, Europe, and Asia to invest in Saudi Arabia. This has led to gradual and exponential growth in local business opportunities."

“The Kingdom’s hosting of the FIFA World Cup in 2034 has created an urgent need for its host cities -Riyadh, Jeddah, Al-Khobar, Abha, and NEOM - to expand their dining and hotel options to accommodate visitors attending the tournament,” Bagedo told Asharq Al-Awsat.

He added that tourism will be a major focus for the Kingdom in the coming years, and hospitality will play a crucial role in strengthening the sector.

The restaurant market in the Kingdom is expected to double annually, reaching approximately SAR 168 billion ($44.8 billion) by 2030.

This growth is driven by strong consumer demand and the increasing presence of renowned brands investing in the local market.

Recent rapid social and cultural changes in restaurant services, fueled by a booming economy, indicate that Saudi Arabia is on track to become a global hub for entertainment and tourism. This growth is supported by restaurants and outlets that cater to the high demand from both local and international visitors.

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Oil Recovers from Multi-year Low but Brent Remains below $70

FILE PHOTO: A view shows an oil pump jack outside Almetyevsk in the Republic of Tatarstan, Russia, June 4, 2023. REUTERS/Alexander Manzyuk/File Photo
FILE PHOTO: A view shows an oil pump jack outside Almetyevsk in the Republic of Tatarstan, Russia, June 4, 2023. REUTERS/Alexander Manzyuk/File Photo
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Oil Recovers from Multi-year Low but Brent Remains below $70

FILE PHOTO: A view shows an oil pump jack outside Almetyevsk in the Republic of Tatarstan, Russia, June 4, 2023. REUTERS/Alexander Manzyuk/File Photo
FILE PHOTO: A view shows an oil pump jack outside Almetyevsk in the Republic of Tatarstan, Russia, June 4, 2023. REUTERS/Alexander Manzyuk/File Photo

Oil prices were steady on Thursday, recovering slightly from a multi-year low, though Brent was still below $70 under pressure from trade tariffs between the US, Canada, Mexico and China and OPEC+ plans to raise output.

Those factors and a larger than expected build in US crude inventories had sent Brent as low as $68.33 on Wednesday, its weakest since December 2021. Brent futures were up 28 cents, or 0.4%, at $69.58 a barrel by 0957 GMT on Thursday while US West Texas Intermediate crude futures gained 32 cents, or 0.5%, to $66.63.

"The US President's intention seems to be for a lower oil price," said John Evans at oil broker PVM, adding that questions remain around whether crude is being oversold, Reuters reported.

Prices had fallen after the US enacted tariffs on Canadian and Mexican goods, including energy imports, at the same time major producers decided to raise output quotas for the first time since 2022.

Oil recovered and stabilized somewhat after the US said it will make automakers exempt from the 25% tariffs.

A source familiar with the discussions said that US President Donald Trump could eliminate the 10% tariff on Canadian energy imports, such as crude oil and gasoline, that comply with existing trade agreements.

"Trump's trade measures are threatening to reduce global energy demand and disrupt trade flows in the global oil market," ANZ commodity strategist Daniel Hynes said in a note.

The OPEC+ producer group, comprising the Organization of the Petroleum Exporting Countries and allies including Russia, decided on Monday to increase output for the first time since 2022.

The resulting retreat in prices was then exacerbated on Wednesday by a rise in US crude inventories, said ANZ's Hynes.

Crude stockpiles in the US, the world's biggest oil consumer, rose more than expected last week, buoyed by seasonal refinery maintenance, while gasoline and distillate inventories fell because of a hike in exports, the Energy Information Administration said on Wednesday.

There are further signs of weakness in American oil demand, with US waterborne crude oil imports dropping to a four-year low in February, driven by a fall in Canadian barrels shipped to the East Coast, ship tracking data shows. Demand was subdued by refinery maintenance including a long turnaround at the largest plant in the region.

Tariffs also remain in effect on US imports of Mexican crude, a smaller supply stream than Canadian crude but an important one for US refineries on the Gulf Coast.

Meanwhile, Chinese officials have flagged that more stimulus is possible if economic growth slows, seeking to support consumption and cushion the impact of an escalating trade war with the United States.