Cenomi Retail, the master franchisee of Subway restaurants in Saudi Arabia, has set a new benchmark by opening 14 Subway locations in a single day—surpassing its earlier record of 12. This bold growth strategy exemplifies Cenomi Retail’s overarching vision for the Kingdom’s burgeoning food and beverage (F&B) sector, forecasted to grow at a CAGR of 9% from 2022 to 2026.
A Booming Market and Cenomi’s Strategic Vision
Saudi Arabia’s F&B market ranks among the region’s most rapidly expanding, propelled by population growth, urbanisation, and shifting consumer habits. Recognising this opportunity, Cenomi Retail has launched an assertive development agenda for its quick-service restaurant (QSR) portfolio. In September 2024, Cenomi Retail’s 28 wholly owned Subway stores accounted for 14.8% of total revenues from first-tier F&B brands operating under its banner. Looking forward, plans to increase the number of Subway outlets to 57 by the close of 2024 will significantly boost the chain’s overall contribution, potentially reaching 25% of tier-one F&B sales by 2025.
The Record-Breaking Day
Opening 14 new Subway restaurants in a single day reflects both Cenomi Retail’s operational efficiency and its strategic clarity. Eight of these stores are conventional outlets nestled in prime, high-traffic areas, including 12 openings within Riyadh alone. A further six non-traditional outlets have also been inaugurated in hospitals, banks, universities, and government premises—underlining Cenomi’s adaptability in catering to varied customer segments.
“By increasing the variety of store locations, whether in traditional or non-traditional venues, we respond to consumers’ needs even more effectively,” noted Salim Fakhouri, CEO of Cenomi Retail.
Optimising ROI
The company anticipates a short payback period of around 2.7 years for these new sites, underscoring the favourable financial outlook for Subway’s business model in Saudi Arabia. Centring expansion on premium sites and fostering strategic alliances with diverse institutions has proved instrumental in consolidating a sustained customer flow and, consequently, robust revenue. “This diverse strategy enables us to tap into a wide range of consumer segments, delivering an exceptional experience across various locations within the Kingdom,” added Fakhouri.
Expanding the Subway Brand in Saudi Arabia
Subway’s growing popularity in Saudi Arabia dovetails with the Kingdom’s broader drive for economic diversification and improved standards of living—core tenets of Vision 2030. Cenomi Retail’s aggressive rollout of new outlets not only caters to a rising appetite for high-quality, convenient food options, but also underscores the Kingdom’s broader shift towards novel F&B trends. By situating Subway restaurants closer to consumers, Cenomi Retail capitalises on Saudi Arabia’s mounting dining-out culture, resulting in greater brand visibility and customer loyalty.
Why Cenomi’s Strategy Works
Cenomi Retail’s record-breaking feat highlights several elements that underpin its success:
- Prime Location Selection: Locating half of these new outlets in Riyadh, Saudi Arabia’s commercial and population hub, promises higher footfall and strong sales potential.
- Non-Traditional Venues: Placing stores in hospitals, universities, and government buildings broadens the consumer base and secures a varied stream of customers.
- Rapid Payback Period: An estimated two to three years for return on investment speaks to the profitability of Subway’s model and Cenomi’s well-calculated site choices.
- Leveraging Brand Strength: Subway’s existing reputation boosts customer acquisition, helping Cenomi Retail draw both loyal patrons and newcomers seeking fresh alternatives in QSR.
Future Growth Potential
By pursuing 57 operational Subway stores by the end of 2024, Cenomi Retail is poised to strengthen its standing as a key F&B conglomerate in Saudi Arabia. This trajectory not only cements Subway’s position as a leading sandwich chain, but also bolsters Cenomi Retail’s footprint in the Kingdom’s competitive QSR segment.
Looking ahead, Cenomi Retail’s combination of traditional and non-traditional sites—coupled with collaborations across diverse industries—should sustain revenue growth, facilitate broader market penetration, and unveil fresh opportunities for expansion. With Saudi Arabia’s F&B industry on the cusp of continued evolution, Cenomi Retail appears well-equipped to remain at the forefront of this dynamic landscape.
Image Source, Credits & Rights: Subway
