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Saudi Arabia Food Service Market Size, Share and COVID-19 Impact Analysis, By Type (Full Service Restaurants, Quick Service Restaurants, Institutes, and Others), Service Type (Commercial and Institutional), 2022-2029

Region : Saudi Arabia | Format: PDF | Report ID: FBI106896



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The Saudi Arabia food service market size was USD 12.57 billion in 2021. The market is projected to grow from USD 14.16 billion in 2022 to USD 30.47 billion by 2029, exhibiting a CAGR of 11.57% during the 2022-2029 period. The global COVID-19 pandemic has been unprecedented and staggering, with the food service market experiencing a lower-than-anticipated demand across Saudi Arabia compared to pre-pandemic levels. Based on our analysis, the market exhibited a decline of -28.73% in 2020 as compared to 2019.

The declining growth of the Saudi Arabian market is majorly due to the closure of food products sale outlets, increased travel curbs, and the fear of transmission of the viral disease via social gatherings or other occasions. However, with the fading effects of COVID-19, the food service segment aims to expand its business line by introducing innovative products and coupon offers to attract the consumer's attention, thus expected to drive market growth. Moreover, rising demand for home delivery and increased surge for eating outside in food premises, further fuels the market growth. Thus, the increased adoption of this market in the food industry positively impacted the market's growth.


Disturbances in Manufacturing facilities and Distribution Channels During Pandemic Impeded Performance of Market

The COVID-19 impact has harshly impacted the food and beverage industries in every part of the world, including Saudi Arabia. The country has always been one of the attractive spots for the growing tourism industry and hospitality services across the globe. But, since the outbreak of the deadly coronavirus, this market of Saudi Arabia has experienced a devastating drop in revenue share during the analysis period.

During the pandemic period, people were forced to stay indoors to prevent the spread of coronavirus, which has indirectly increased the home-cooking. Thus, this has significantly increased the consumption of home-cooked food, thereby decreasing the market potential. To further fulfill the food cravings, the individuals were more indulged in preparing a variety of cuisines at home, which has also contributed to the dipping growth of this market.

As restaurants and shops were closed, the foodservice markets were left shattered with a massive loss, majorly in terms of production. The supply chain challenges involved a spike in raw material transportation charges, and high labor costs, resulting in poor market sales in this markets. Such instances have harmed the food production as well as the consumption rate of the market. Thus, this resulted in a decline in sales of the food service market share in the Saudi Arabia region.


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Adoption of Western food to Become Prominent Trend for Market Growth

Due to the outgrowing tourism and education, Saudi Arabia has witnessed an overall change in its socio-cultural practices, especially since the pandemic phase. The rapid increase in economy, increased westernization, a large presence of food outlets, and the rising culture for eating out together have contributed to the flourishing growth of this market. Dining at food outlets such as cafes, restaurants, or other quick food services has emerged as one of the novel methods and driving factors for expanding the fast-food industry business in the region. As a result, small or medium-sized business companies are constantly focusing on growing their food service market business by further increasing the number of food outlets across the country.


Increasing Number of Food Malls and Food Courts to Drive Market Growth

In recent years, the number of shopping malls and food malls has expanded rapidly in Saudi Arabia. The shopping malls, which were earlier, concentrated only in capital cities have now spread to tier 2 and tier 3 cities in the last decade. Consumers often prefer shopping for multi-brand outlets under one single roof. Looking at the consumer need of having everything under one roof, this industry is also making use of this consumer behavior by opening specialized multi-branded food courts/halls/malls under one roof. This expansion of food malls created an opportunity for the Quick Service Industry (QSR) industry's fast food chains to grow in numbers rapidly.

New shopping center developments and extensions are increasingly focusing on designing food and beverage (F&B) and lifestyle areas, including stand-alone food stalls and kiosks. Establishing the F&B footprint in retail schemes provides the food service operators an opportunity to increase footfall and consumer stay time, which will ultimately cause them to spend on food.  It is also evolving as one of the popular tourist destinations in the Gulf countries. With the rising number of tourists, footfall in shopping malls is also expected to increase during the forecast period. With the ongoing trend of consumer behavior concentrating on shopping malls culture, this factor is expected to drive the market growth further during the forecast period.

Growing Expansion of International Brands in Market to Fuel Market Growth

Over the last few years, many international casual dining chains have entered the Saudi Arabia market, including Cipriani, Cheesecake Factory, and Hakkasan. Several worldwide popular fine dining hotels & restaurants have recently examined the KSA's market by launching their branches in Saudi Arabia, mainly in Jeddah and Riyadh. Some of them are Scalini, Zuma, and Catch. Apart from the international food chains, local market players and individual operators are also trying to expand their business in the region. A growing number of famous domestic Saudi chefs opening their restaurants is an example of the ever-increasing penetration of local restaurants in Saudi's food service industry.

In addition to the huge investments from private foodservice outlets, the local government authorities are also taking a keen interest in promoting the local market and creating growth opportunities for the food industry. For example, the governing bodies in Jeddah and Riyadh planned to open the first Culinary Arts Academy. These institutions help to train professional chefs and cooks in international cuisines. In Saudi's large cities such as Jeddah and Riyadh, Fast Casual outlets are considered modern establishments and are a new unit category that will attract more consumers in coming years. However, trendy Fast Casual and Full-Service Restaurants are relatively underprovided in this industry. Moreover, ready to Eat establishments are also fewer in the Kingdom of Saudi Arabia. However, as the lifestyle of consumers is getting busier the demand for convenience food is expected to increase and thus quick service restaurants are expected to grow significantly in coming years.


Negative Impact of Online Food Delivery May Hamper Market Growth

Online food ordering is the latest trend in the food service industry which is been adopted by a majority of the consumer group. Customers are staying away from online food ordering, though, due to a few drawbacks. For instance, one issue with food delivery is that the standard of the cuisine is frequently lesser than that of a restaurant meal. Since food must frequently be carried over great distances, their vitamins and minerals are lost during long-distance transportation. Additionally, food from delivery services is sometimes bundled in plastic, which is typically not as appetising as food that is properly arranged on a dish in a restaurant. Another disadvantage of using food delivery services is that they are often not punctual. Due to long delivery distances, food may also get cold after it is delivered. Some items also need to reheat due to this. This is especially true if food is ordered during rush hour, as the streets are usually very busy and the delivery person often gets stuck in traffic.

Other than this, in some restaurants, there is also an interesting atmosphere that customers will miss if they order food on the doorstep. For example, some restaurants have live music playing to entertain the guests, while others may offer live screenings of games or TV shows. Such factors attract the customers to the hotels, which in turn can negatively impact the market’s growth Also, growing food waste sentiments is another reason for which some customers avoid ordering food online. Food delivery services involves the production of too much unnecessary waste. The food is often wrapped in a large amount of plastic which after one use will be thrown away. Plastic waste is an enormous ecological problem and by using a food delivery service it will get worst.  Such negative impacts of online food ordering may hamper the market growth in years to come.


By Type Analysis

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Full Service Restaurants to Dominate Due to the Growing Number of Market Players

The market is divided into full service restaurants, quick service restaurants, institutes, and others.

Included in the category of full service restaurants are sit-down eateries that offer a full meal menu and provide table service to patrons. They provide meals with a variety of options, such as breakfast, lunch, and dinner. Restaurants that specialize in fine dining and casual eating make up the majority of this segment.

Quick service restaurants (QSRs) segment comprises of fast food chains and independent stores. QSR's has a limited menu and they tend to specialize selective main entrees such as burgers, pizza, or chicken.

The institute type includes the canteens and catering services available at institute levels such as hospitals, schools, colleges, and movie theatres. This type of food consumption is a comparatively new trend in comparison with traditional full service restaurants and fast food restaurants.

Other segment in the type category include services provided by food trucks, individual shop owners, and cloud kitchen services. Food trucks and cloud kitchens are the latest attractions in young consumers. Hence, they tend to try food prepared by these types of operators, which supports the growth of the Saudi Arabia market.

By Service Type Analysis

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Commercial Service Providers to Exhibit Strong Growth Owing to the Growing Convenience and Popularity for Dine-in

On the basis of service type, the food service providers are segmented into commercial and institutional service providers.

Commercial food service operators are those who offer services for dine in or takeaway services while institutional food service can be defined as services offered in institutes levels such hospitals, caterings, school, and colleges. Owing to the growing number of salaried professionals in a household the frequency of eating by a family out has increased over the past few years. This is mainly attributed to the convenience of availing food easy and faster, need of socializing with friends/colleagues/families, shortage of time to cook meals at home, and growth of fast food chains. With increasing number of such fast food outlets, young consumers are spending more on food consumed outside home. Institutional level catering such as catering in hospitals, schools, and colleges is an emerging concept in Saudi Arabia. Such concepts were only present in urban areas are now expanding in rural areas and smaller cities in the country. With the expansion of institutional-level catering services in such cities, this segment offers lucrative growth opportunities that will support the Saudi Arabia food service market growth.  


Key Players Investing in Expanding their Food Outlets that Contribute to Market Growth

The market is highly fragmented with the presence of several prominent players. The increasing popularity of the casual dining and rising demands for fast food and its variants as well as augmented growth of food courts have significantly escalated the market growth momentum. Some prominent players include Starbucks Corporation, McDonald's Corporation, Domino's Pizza, Inc., Papa John's International, Inc. and others. These companies have a noteworthy presence in the fast-food business due to their vast distribution channel, which fuels the market growth. Due to intense competition, collaboration and acquisition of smaller companies by bigger companies have increased significantly in recent years. Moreover, the rising fast food chains in the foodservice industry has created an opportunity for market players to invest heavily in increasing their sales in the market.


  • Starbucks Corporation (U.S.)

  • Yum! Brands, Inc. (U.S.)

  • McDonald's Corporation (U.S.)

  • ALBAIK Food Systems Company Ltd. (Saudi Arabia)

  • Restaurant Brands International Inc. (Canada)

  • Domino's Pizza, Inc. (U.S.)

  • Herfy Food Services Co. JSC, KSA (Saudi Arabia)

  • KUDU Company for Food and Catering (Saudi Arabia)

  • Papa John's International, Inc. (U.S.)

  • Hardee's Restaurants LLC (U.S.)


  • July 2022: BRF Sadia, one of the leading food companies, announces the inauguration of its new manufacturing facility, “Al Joody,” in Dammam, Saudi Arabia. This new plant will focus on manufacturing poultry products, in order to suffice the growing demands of the consumers. In addition, BRF, works in accordance with Saudi Arabia Vision 2030, which will further encourage the local players to invest in the local market, for betterment of the firm.

  • January 2022: Halwani Bros. Co. invested around USD 53 million in a non-binding agreement with sister company of Albaik Food Systems Co., Aquat Food Industries Co. This sister company owns the technical knowledge and rights to manufacture products of Albaik. Through signing this agreement, the company aims to supply the locally-produced food products required to operate Albaik restaurants in Egypt.

  • February 2022: Herfy Food Services Co. JSC, KSA is continuously working on expanding its product line and include new products in its product line. For instance, in February 2022, it launched chicken cordon bleu burger in the market. Such new product launch helps the company reach out to new markets and attract new consumers looking for an exciting taste experience.

  • November 2021: Tahalof Al Tamm Investment Co. acquired KUDU Company for Food and Catering in November 2021. The Saudi General Authority for Competition approved the acquisition of the company by the investment group this year. Thrugh such acquisition the company aims to magnify its production operation and procure the necessary funds which are required for market expansion.

  • December 2019: KFC Saudi Arabia entered into a strategic partnership with leading poultry companies and suppliers in Saudi Arabia, namely, Almarai's, Alyoum, Al-Watania Poultry and Tanmiah Food Group. This partnership is helping the company source high quality fresh chicken products from the suppliers to its 200 outlets spread across the country.


An Infographic Representation of Saudi Arabia Food Service Market

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The Saudi Arabia report includes quantitative and qualitative insights into the food service market. It also offers detailed market research for all possible market segments. Various key insights presented in the report are an overview of related markets, competitive landscape, recent industry developments such as mergers & acquisitions, the regulatory scenario in critical countries, and key industry trends.

Report Scope & Segmentation



Study Period


Base Year


Estimated Year


Forecast Period


Historical Period



Value (USD Billion)


By Type

  • Full Service Restaurants

  • Quick Service Restaurants

  • Institutes

  • Others

By Service Type

  • Commercial

  • Institutional


Frequently Asked Questions

Fortune Business Insights says that the market size stood at USD 12.57 billion in 2021 and is projected to reach USD 30.47 billion by 2029.

The market is projected to grow at a CAGR of 11.57% during the forecast period (2022-2029).

The full service restaurants are expected to be the leading type of segment in the market.

Increasing number of food malls and courts and increased spending on food consumed out of home, contributes to the market growth.

McDonalds Corporation, Herfy Food Services Co. JSC, KSA and ALBAIK Food Systems Company Ltd. are a few of the top players in the market.

Commercial Service Providers is expected to be the fastest-growing segment during the forecast period.

Negative impact of online food delivery is contributing to the poor market growth momentum.

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