Monday 20 August 2012

The Future of Foodservice in United Arab Emirates to 2016

Increase in health concerns encourage a new demand for healthy convenience food
 
London, August 20th, 2012 – In 2011, the profit sector accounted for 91.8% of total sales, which represented a value of AED17,672.4 million (US$4,812.2million) and a CAGR of 6.23% in local currency. The cost sector, which accounted for the remaining 8.2% of the total Emirati foodservice industry sales in 2011, grew at a CAGR of 6.36% in local currency from AED1,156.8 million (US$315.0million) in 2006 to AED1,574.4million (US$428.7million) in 2011 (reference graph below).  


The restaurant channel remained the largest in terms of foodservice sales, contributed for 56.2% of profit sector sales.  The growth in restaurant sales was primarily a reflection of the increase in sales by coffee and teas shops, and quick-service restaurant (QSR) and fast food shops. The largest channel in the cost sector was education foodservices, which contributed 58.8% to the total cost sector sales and recorded a CAGR of 6.55%.

A strong economic growth is one of the major growth drivers for the foodservice industry in the UAE. The Emirati economy is dynamic and growing, and is considered to be one of the fastest growing economies in the Middle East and Africa. A reduction in the unemployment rate led to higher footfall and increased consumer spending.

The fluctuating inflation rate had a negative impact on the foodservice industry, which rose from 6.2% in 2006 to 12.3% in 2008, but fell to 0.9% in 2010, and is forecast to reach 2.5% in 2012. Fluctuations in inflation influence the purchasing decisions of consumers.

Tourism growth in the UAE has been one of the major factors behind its economic development over the review period. The UAE is one of the most easy to visit Middle East countries due to easily obtained visas. With the growth of the tourism industry and thereby the hotel and leisure industries, the foodservice sector is therefore expected to benefit as well.

Over the review period, demographic and social changes have shaped the growth of the foodservice industry in the UAE. A growth in ethnic diversity within the Emirati society has influenced food consumption patterns and demand.

There has been a growth in the proportion of females in the total working population of the country over the review period. Such demographic developments tend to promote the growth of western restaurants, especially fast-food restaurants, cafes, and other quick-service outlets.

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