Posted inFood & Beverage

Is the UAE’s F&B industry over-saturated?

Another 1,600 F&B outlets could open by 2019, according to KPMG

The UAE has about 16,234 food and beverage outlets and is expected to increase to 19,053 by 2020, according to KPMG’s Anurag Bajpai at the Caterer Food and Business Conference 2017, held at Grosvenor House on March 7.

But that’s not all: another 1,600 F&B outlets could open by 2019, according to KPMG. The UAE’s F&B industry is one of the world’s leading markets, with market size measured by Euromonitor at AED 52.4 billion (US $14.27bn) in 2015. 

The F&B sector is estimated to grow at an average of 4% annually over the next four years. Despite the market growing overall, the operators surveyed indicated that same store sales over the last 12 months have either been 64% stagnant or have declined.

Jumeirah Restaurant Group general manager Emma Banks said at the conference: “Dubai’s F&B is very discount driven because of the number of outlets and restaurants and bars and its at it’s saturation point.”

KPMG partner Anurag Bajpai said: “There is no lack of eating out options across the UAE and the increase in supply, in some segments of the market, continues to exceed the increase in demand. While the outlook for the sector as a whole has probably never been better, for individual players, the market has become increasingly competitive and thus challenging.”

In 2016, Michelin-starred chef Pascal Aussignac said to sister publication Arabian Business that the market isn’t oversaturated but “that there aren’t enough high-end outlets in UAE.”

However, Bajpai added: ” Consumer demand and behaviour is positive in the region. Consumers continue to spend on eating out. Nine out of ten consumers are spending as much as or even more than what they were in 2015 and the average spend per head for consumers form 2015 to 2016 has gone up.”