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Investment Incentives Drive Growth in Saudi Restaurants and Cafés Sector

The restaurant and café sector plays a crucial role in Saudi Arabia’s Quality of Life program and Vision 2030. (Asharq Al-Awsat)
The restaurant and café sector plays a crucial role in Saudi Arabia’s Quality of Life program and Vision 2030. (Asharq Al-Awsat)
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Investment Incentives Drive Growth in Saudi Restaurants and Cafés Sector

The restaurant and café sector plays a crucial role in Saudi Arabia’s Quality of Life program and Vision 2030. (Asharq Al-Awsat)
The restaurant and café sector plays a crucial role in Saudi Arabia’s Quality of Life program and Vision 2030. (Asharq Al-Awsat)

Saudi Arabia’s restaurant and café sector is experiencing rapid growth, fueled by a young population and rising disposable incomes, making the country an attractive market for international brands. The sector is expected to expand further, supported by new investment laws and government initiatives.

Saudi Arabia, one of the largest markets in the region, is witnessing a boom in its restaurant and café industry, with both local and international brands competing for market share. The sector is expected to grow even more with the introduction of the new investment law, designed to attract investors by simplifying investment procedures.

The Saudi government recently approved a new investment system, which is seen as a significant move to stimulate foreign investment and support local businesses.

According to Saudi Minister of Investment Khalid Al-Falih the law builds on previous reforms, ensuring a supportive and secure environment for both domestic and international investors.

Sales in Saudi restaurants and cafés reached SAR 23.96 billion ($6.38 billion) in the second half of 2024, a 30.6% increase compared to the same period in 2022.

The sector saw continued growth, with restaurant sales rising by 13.66% to SAR 89.3 billion ($23.8 billion) in 2023, up from SAR 78.6 billion the previous year.

Spending in cafés and restaurants accounted for 14.76% of total sales transactions across all sectors during this period.

The restaurant and café sector plays a crucial role in Saudi Arabia’s Quality of Life program and Vision 2030, as it boosts the Kingdom’s lifestyle and aims to reach 3,000 restaurants and over 1,000 cafés per million residents by 2030.

Research firm Mordor Intelligence expects the Saudi food service market to grow from $27.18 billion in 2024 to $42.48 billion by 2029, with a compound annual growth rate of 9.34%.

The café sector, in particular, is expected to grow at an annual rate of 11.74%, driven by increasing demand for social and workspaces. Saudi Arabia already hosts over 40% of the Middle East’s 8,800 branded cafés.

In line with this growth, the Lavoya Restaurants Group, which operates fast-food chains across the Gulf, is expanding in Saudi Arabia. Najib Yaacoub, Chief Operations Officer at Lavoya Restaurants Group, said the expansion will create job opportunities and contribute to the national goal of increasing employment in the hospitality sector.

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Iran's Rial Hits a Record Low, Battered by Regional Tensions and Energy Crisis

An Iranian trader counts money in Tehran's Grand Bazaar. (Reuters)
An Iranian trader counts money in Tehran's Grand Bazaar. (Reuters)
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Iran's Rial Hits a Record Low, Battered by Regional Tensions and Energy Crisis

An Iranian trader counts money in Tehran's Grand Bazaar. (Reuters)
An Iranian trader counts money in Tehran's Grand Bazaar. (Reuters)

The Iranian rial on Wednesday fell to its lowest level in history, losing more than 10% of value since Donald Trump won the US presidential election in November and signaling new challenges for Tehran as it remains locked in the wars raging in the Middle East.

The rial traded at 777,000 rials to the dollar, traders in Tehran said, down from 703,000 rials on the day Trump won.

Iran’s Central Bank has in the past flooded the market with more hard currencies in an attempt to improve the rate.

In an interview with state television Tuesday night, Central Bank Gov. Mohammad Reza Farzin said that the supply of foreign currency would increase and the exchange rate would be stabilized. He said that $220 million had been injected into the currency market, The AP reported.

The currency plunged as Iran ordered the closure of schools, universities, and government offices on Wednesday due to a worsening energy crisis exacerbated by harsh winter conditions. The crisis follows a summer of blackouts and is now compounded by severe cold, snow and air pollution.

Despite Iran’s vast natural gas and oil reserves, years of underinvestment and sanctions have left the energy sector ill-prepared for seasonal surges, leading to rolling blackouts and gas shortages.

In 2015, during Iran’s nuclear deal with world powers, the rial was at 32,000 to $1. On July 30, the day that Iran’s reformist President Masoud Pezeshkian was sworn in and began his term, the rate was 584,000 to $1.

Trump unilaterally withdrew America from the accord in 2018, sparking years of tensions between the countries that persist today.

Iran’s economy has struggled for years under crippling international sanctions over its rapidly advancing nuclear program, which now enriches uranium at near weapons-grade levels.

Pezeshkian, elected after a helicopter crash killed hard-line President Ebrahim Raisi in May, came to power on a promise to reach a deal to ease Western sanctions.

Tensions still remain high between the nations, 45 years after the 1979 US Embassy takeover and the 444-day hostage crisis that followed. Before the revolution, the rial traded at 70 for $1.