The casual dining restaurants sector is one of the fastest growing business segments in Saudi Arabia and with more players entering the scene, the market will be worth SR28.9 billion ($7.69 billion) by 2014, said an industry expert.

Saudi has seen almost all the major international casual dining restaurants penetrate the market, while several other chains have either signed up for franchising or are in the planning phase.

“The late 1990’s was the time when the casual dining concept started setting foot in the Saudi market and within a span of 15 years, this segment has witnessed aggressive growth and penetration by new chains,” explained Dr Adnan Soufi, the CEO of Sedco Holding, the owner of widely diversified companies in the Kingdom.

“The trend continues as Saudi Arabia’s prosperous economy consistently shows healthy growth, leading to higher disposable income, which in turn prompts consumers to frequent foodservice outlets,” he added.

Among the top international casual dining restaurants chains present in the Kingdom include Applebee’s, Outback Steak House, Chilis and TGI Fridays.

Given the population size the main casual dining restaurants markets are Riyadh, Jeddah and the Eastern Province, but even smaller markets are becoming attractive hubs for investment, he stated.

"Another key factor boosting growth of the casual dining segment is that the majority of the population is young and dining out not only provides them a source of entertainment and engagement, but also acts as a platform where they feel connected to other cultures," explained Dr Soufi.

These three main factors; high disposable income, global exposure and limited sources of entertainment – together with the ever increasing number of malls in the country – present an immense opportunity not only for casual dining restaurants to capture larger market share and expand at a much faster pace.

"Accordingly, operators in the casual dining restaurants market are expected to proceed with their expansion strategy and the number of outlets is anticipated to reach approximately 17,000 by 2014," he added.

Since casual dining was becoming increasingly popular, Sedco saw an opportunity and decided to create Arabian Entertainment Company (AECL) in 1996, a firm specializing in restaurant industry, with a strong brand and strong corporate governance that falls within Shariah principles and investment guidelines.

Today, Sedco is an employer of more than 1800 people in Saudi, a number which has been boosted by the Group’s decision to enter the restaurant industry, a sector that is a significant economic driver of employment in the Kingdom.

Part of Sedco’s strategy is to partner with top global players and in establishing AECL, the firm has secured the Saudi franchise rights for Applebee’s Grill and Restaurant, the world’s largest casual dining restaurant group with over 2,000 restaurants in 19 countries including Europe, South America, North America, the Middle East and South East Asia.

AECL opened its first Applebee’s restaurant in Jeddah in 2003. Today it is the largest franchisee for Applebee’s in the Middle East and currently operates 13 restaurants in all major cities in Saudi.

There are more Applebee’s restaurants in the Kingdom than any other core casual dining restaurants making it the most recognized brand in the market.

AECL chief executive officer Ahmed Marashde said: “Consumers don’t only want to enjoy casual dining food inside the restaurants but also want to enjoy the same taste in the comfort of their homes, hence a lot of casual dining restaurants have started home delivery services."

"In addition, Takeaway is another big potential for casual restaurants. At every level, due to increasing competition, restaurant chains are looking for extra revenue channels - or in industry terms what is called additional day part – and some international chains like Applebee’s have started offering breakfast in some of their locations," he added.-TradeArabia News Service