Michael Hussey, Dubai Office, Bord Bia – Irish Food Board
Saudi Arabia's retail sector supplies a population of around 33million people living in the Kingdom. Average household size of 6.4 persons in 2017. This is expected to reach roughly 34.9mn by 2021.
The grocery retail market increased by 5% per annum in value terms from 2012 to 2016. Traditional grocery retailers continue to make up an important part of grocery retail sector in Saudi Arabia, mainly due to the presence of the strong network of baqalahs (local family run stores). This is estimated at around 57% of the total market but it is reducing with the expansion of Modern retail. The total number of hypermarkets and supermarkets is 1,255 outlets or about 3% of the total number of retail outlets. These account for 37% of total grocery sales in Saudi Arabia. This is where Irish food exporters need to be.
Panda Retail Co is continuing to expand rapidly by increasing the number of hypermarkets-63, Supermarkets 204 and Pandati convenience stores-262. Panda is the number 1 retailer in Saudi with a 20% share of modern retail or 8% share overall.
Danube (Bin Dawood Group) and Lulu Hypermarket also expanded their chains by adding new outlets. Other supermarket chains such Farm Superstores and Al Jazeers Superstores are continuing strong expansion programmes and are looking to increase the availability of imported brands.
The trend towards greater convenience saw Bin Dawood Group become the first Saudi grocery retailer to launch a smartphone app in 2016, enabling consumers to place orders for its Danube brand online and then either have their purchases prepared for in-store.
Prospects
Independent small grocers (baqalahs) are expected to remain a popular but declining choice for Saudi consumers. Hypermarkets and supermarkets are set to register the strongest growth rates in grocery retailers during the forecast period, with respective value CAGRs of 6% and 5% expected at constant 2016 prices. Buyers from Panda, Farm Foods and Al Jazeera supermarkets along with a number of retail and foodservice distributors from Saudi Arabia were in attendance at Bord Bia’s Marketplace on April 12th in Dublin.
For more information please contact Michael.hussey@bordbia.ie