Thursday, Dec 17, 2015
Dubai: The Gulf Cooperation Council (GCC) countries’ food services market is expected to have a compound annual growth rate (CAGR) of 6.8 per cent to reach $24.5 billion (Dh89.9 billion) in 2018, up from $18.8 billion in 2014, according to a statement on Thursday from investment firm Al Masah Capital.
The food services sector in the GCC countries is expanding rapidly on the back of a flourishing economy, favourable demographics and steady rise in per capita income, as per the statement.
“Rising population is one of the key drivers of food consumption. The rising flow of tourists to GCC has helped drive demand. As most major foodservices outlets are concentrated in the tier 1 and 2 cities of the GCC countries, the rapid growth in urbanised population is expected to act as a stimulus to the growth in the food service sector,” said Shailesh Dash, chief executive of Al Masah Capital, in the statement.
Fast food
Saudi Arabia leads the region with total food service sales of $8.9 billion, accounting for nearly half of the Gulf market. The UAE is second, with total sales of $5.3 billion generating a 28 per cent share in the region, followed by Kuwait with $1.9 billion, Qatar with $1.3 billion, Oman with $1.1 billion and Bahrain with $0.4 billion.
Within the food services sector, fast food segment or quick service restaurants is the largest, accounting for 58.2 per cent ($10.9 billion) of the Gulf’s food services market in 2014, followed by full service restaurants at 31.5 per cent $5.9 billion and cafe and bakery segment at 10.3 per cent ($1.9 billion).
However, there are factors affecting accelerated growth within the sector including increase in competition, weak supply chain infrastructure, high rentals in prime commercial properties and shortage of skilled human capital, according to the statement.
Staff Report
Gulf News 2015. All rights reserved.
