The food services sector in Saudi Arabia and the UAE is enjoying remarkable expansion, driven by robust economic growth, shifting social norms, and an ever-increasing consumer appetite for convenient dining options. This thriving industry encompasses cafés, full-service restaurants, and fast-food outlets, while notably excluding grocery providers. Of particular interest is the rise of cloud (or ghost) kitchens, which focus exclusively on preparing meals for delivery or takeaway. Thanks to their relatively low operating costs, these delivery-only ventures have surged in popularity in both nations, powering a food services boom, mirroring the broader trend towards online food ordering.
Saudi Arabia: A Transforming Food Scene
Over the past decade, Saudi Arabia’s food services industry has embarked on an impressive growth trajectory, spurred by progressive government policies and evolving social dynamics. This has led to an increase in restaurants, cafés, and other dining establishments, climbing from fewer than 40,000 prior to COVID-19 to upwards of 60,000 by 2022. A confluence of factors underpins this boom, including population growth, rising incomes, and an influx of expatriate workers. Employment within the sector reached 608,700 in 2022, marking a 16.9% year-on-year increase.
According to the Saudi Arabian General Authority for Investment, the industry is projected to grow by 6% between 2021 and 2026, a forecast supported by both local and foreign investment. Key players such as Americana Restaurants, operating 687 outlets under brands like KFC and Pizza Hut, and Alshaya, with over 450 Starbucks locations, are seizing these opportunities. With the Saudi government’s emphasis on domestic tourism and continued societal changes influencing dining habits, the food services sector appears poised for further expansion.
UAE: A Per-Capita Powerhouse
Although smaller than its Saudi counterpart in absolute terms, the UAE’s food services market rivals it on a per-capita basis, thanks to the country’s affluent population, well-established tourism sector, and robust dining-out culture. According to UNCTAD data from 2021, the UAE was home to 22,517 food-serving establishments, a figure that has now neared 30,000.
Economic stability, pro-business policies, and a flourishing tourism industry have proven instrumental to this food services boom growth. Dubai, in particular, attracts culinary enthusiasts from around the globe, with 9.31 million international overnight visitors recorded in early 2024—surpassing pre-pandemic figures. Abu Dhabi is similarly on the rise, welcoming 2.4 million visitors between January and May 2024. Although employment in food services dipped during the pandemic, it is rebounding alongside renewed population growth and surging travel.
Cloud Kitchens: The Future of Food Services
Cloud kitchens are transforming the culinary landscape in both Saudi Arabia and the UAE, catering to modern consumers who value speed and convenience. By eliminating the need for dining space and prioritising delivery or pickup, these operations benefit from lower overheads—making them attractive to both established brands and new market entrants. The proliferation of digital ordering systems, delivery apps, and consumer desire for quick, affordable fare has fuelled the rapid uptake of this model.
Tourism as a Catalyst
Tourism remains integral to the prosperity of food services in the region. Both Saudi Arabia and the UAE boast rich cultural heritages, robust infrastructures, and strategic locations, ensuring a steady influx of visitors. The Saudi government’s push for domestic tourism—alongside the development of leisure and entertainment venues—continues to expand the need for diverse dining choices. Meanwhile, the UAE’s international standing as a cosmopolitan hub ensures a constant stream of visitors eager to explore new culinary delights.
A Bright Future for Food Services
The outlook for the food services sector in Saudi Arabia and the UAE is unequivocally positive, buoyed by changing consumer preferences, extensive government support, and economic diversification. Local diners increasingly seek out innovative concepts, from fusion cuisine to health-conscious offerings, fuelling further demand for cutting-edge dining experiences.
Technology is also set to play a key role in maintaining growth, as digital ordering, advanced data analytics, and improved delivery methods enhance both efficiency and profitability. Combined with expanding populations and cultural shifts, these factors ensure ongoing evolution within the sector, creating a wealth of opportunities for businesses and customers alike.
In essence, the success of food services in Saudi Arabia and the UAE reflects broader regional trends of dynamic economic development and cultural modernisation. As the industry continues to flourish, propelled by investment and creativity, it stands as a vital engine of growth and innovation in the Middle East.
