Roemer Capital Expands Saudi Market Research Coverage with In-Depth Analysis of Food Retail & Services Sector

Roemer Capital continues to strengthen its research footprint in Saudi Arabia with the initiation of coverage on four key stocks within the Kingdom’s food supply chain: Al Othaim and BinDawood in the retail segment, Alamar Foods in quick-service restaurants (QSR), and Jahez in online food delivery.

Saudi Arabia’s personal consumption outlook remains highly attractive, with consumption as a share of GDP trailing similar export-oriented economies by 15-20 percentage points. Structural shifts — including a young, tech-savvy population, evolving lifestyles, and rising female labor force participation — are expected to drive increased demand for convenient, quick, and online shopping solutions.

In the grocery retail sector, significant consolidation potential exists as traditional neighborhood shops (baqalas) are likely to continue to give way to the modern chains and online channels. Analysis of global emerging markets suggests that consolidation is a key trend, with modern formats progressively replacing traditional ones. However, in the near term, subdued food inflation, intensifying competition, and rising store expansion costs are expected to put pressure on Al Othaim and BinDawood.

Meanwhile, the foodservice market in Saudi Arabia is on a strong growth trajectory, with a projected 9% CAGR from 2023 to 2030 (Redseer). The sector’s digital transformation is creating new opportunities, particularly for Alamar Foods, the country’s largest branded pizza operator, which benefits from increasing consumer preference for online ordering and delivery.

Food delivery penetration in Saudi Arabia remains lower than in neighboring GCC countries, offering double-digit growth prospects (12% CAGR 2023-2030, according to Redseer) for online aggregators. Jahez, as a market leader, is well-positioned to capitalize on this trend, leveraging its experience and resources to sustain competitive advantage.

While Alamar and Jahez are expected to benefit from sector tailwinds, Othaim and BinDawood face near-term challenges due to pressure on sales densities and cash flows. Roemer Capital will continue to monitor and analyze market dynamics, providing institutional investors with critical insights into Saudi Arabia’s evolving food retail and services landscape.

“Saudi Arabia’s food retail and services sector is undergoing a rapid transformation, driven by shifting consumer behaviors and digital adoption,” said Artem Yamshchikov, Analyst at Roemer Capital. “While we anticipate mid-term challenges for the brick-and-mortar retailers, the long-term outlook remains highly attractive, with digital-first and asset-light players like Jahez and Alamar well-positioned to capture significant growth opportunities.”