Saudi Arabia's retail and food and beverage market maintained strong momentum in the first half of 2026, supported by resilient consumer spending, low inflation and continued expansion of the non-oil economy, according to Knight Frank.

Consumer spending across point-of-sale (POS) transactions, cash withdrawals and e-commerce purchases rose 6.8% year-on-year to 425 billion riyals ($113.3 billion) in the first quarter, building on a record 1.57 trillion riyals spent through official payment channels in 2025, the property consultancy said in its Saudi Arabia Retail Market Overview – Summer 2026.

Saudi Arabia's economy grew 3% in the first quarter, driven by 2.9% growth in non-oil activities, while inflation remained at 1.8%, helping sustain consumer confidence despite regional geopolitical tensions.

Digital commerce continued to outpace traditional retail, with e-commerce spending jumping 42% year-on-year to 98.4 billion riyals, while POS spending increased 4.4% to 189.7 billion riyals. Cash withdrawals fell 7% to 136.8 billion riyals, reflecting a continued shift toward cashless payments.

Discretionary spending remained robust, led by jewellery, where POS transactions rose 47%, followed by clothing and accessories, up 25.9%, and telecommunications, which increased 23%.

"Saudi Arabia's retail market continues to benefit from strong economic fundamentals," Faisal Durrani, Partner and Head of Research for MENA at Knight Frank, said. He said resilient consumer spending, stable inflation and sustained non-oil growth continued to support retailer confidence and strengthen the Kingdom's appeal as a retail investment market.

Durrani said retailers and developers were increasingly focusing on entertainment, wellness and community-focused destinations as consumers sought shopping experiences that combine retail, dining and leisure.

Knight Frank said retail market fundamentals remained broadly stable across Saudi Arabia's three largest metropolitan areas.