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UAE's food sector under retail expansion pressure

DUBAI, June 8, 2015

The UAE's food and beverage industry faces the risk of buckling under the rapid pace of shop openings, warns a professional services consultancy.

Another 1,600 F&B outlets could open by 2019, according to a new report from KPMG.

"The sector is thriving at the moment and will continue to do so for the foreseeable future," said Anurag Bajpai, the company's head of F&B.

But some sectors, including the ubiquitous gourmet burger chains, are already overheating.

"There are now four times as many brands than before but the demand has not risen by the same rate, so we are bound to see some constriction in the sector or differentiation in the outlets. The opportunity is in the gaps in the market, such as Filipino cuisine, which is generally under-served," he added

KPMG estimates the F&B sector will grow an average of 4 per cent annually over the next four years.

Despite the significant expansion of restaurants and cafes in recent years, under-represented niche markets still exist, the survey found.

The survey, based on 432 respondents that broadly mirrored the country's demographics, revealed that two in three people ate out at least once a week.

Word of mouth reviews spread by social media emerged as a key reason people chose to dine in particular restaurants.

The cost of the establishment was sixth on the list of factors that people consider while choosing where to eat, with the cuisine, service, variety, location and ambience all ranked above the affordability of a particular restaurant.

Rapidly rising passenger growth through Dubai has also driven investment in new restaurant openings.

Elsewhere, Dubai again ranked as one of the top destinations for international travellers, according to the MasterCard Global Destination Cities Index. Dubai came fourth this year, behind London, Bangkok and Paris.

According to the study, Dubai is expected to receive almost 14.3 million international visitors this year, an increase of 8 per cent since last year.-Reuters




Tags: Food | retail expansion |

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