Retail Saudi shoppers heavily favour local produce By Andrew Hammond July 15, 2024, 9:38 AM Usplash+/Getty Nine in 10 Saudi food shoppers look for produce that was sourced locally, according to a survey Shoppers open to new technology Local produce very important Discounting opportunities for retailers Saudi shoppers heavily favour local produce over imported foodstuffs and have a high interest in the use of artificial intelligence in food shopping, a new survey has found. It also described the Saudi supermarket sector as a huge opportunity for discount retailers. The Customer Perception Map by global consultancy Oliver Wyman, which included Saudi Arabia for the first time, said the Saudi market was ripe for developing along the lines of the United Arab Emirates, where consolidation and specialisation is taking place. NewsletterGet the Best of AGBI delivered straight to your inbox every week UAE supermarket operator Spinneys opened its first supermarket in Saudi Arabia this year and is planning a further 12 stores in the country by 2028. “Saudi Arabia’s retailers may also have an advantage over their Western counterparts in that Saudi consumers appear to be more willing to engage with new technology,” the report finds. “Saudi customers are three times more interested in using customer service and shopping assistant chatbots than their US counterparts.” The survey found that 90 percent of customers actively seek out fruit and vegetables produced locally, while 51 percent said price is their prime concern. This means retailers could “take larger control of their supply chains and offer unique high-quality fresh products,” it said. The report said these preferences could open a window for major European discount retailers such as Aldi and Lidl to expand into the Saudi market. The bricks-and-clicks battle to win over GCC shoppers Buy now, pay later growing fast in UAE and Saudi Arabia Agthia enters Saudi protein market with $25m facility “Of the respondents familiar with European discounters, 93 percent indicated that they would shop at these stores if they came to Saudi Arabia,” the report said, adding it was only a question of time before the low-cost discounters gained traction in the region. “While several homegrown brands are already pushing to stand out in this sector, the opportunity exists for greater competition.” Saudi Arabia’s fast food market, meanwhile, is growing rapidly. Sales are expected to rise from more than $9 billion this year to $15 billion in 2029, with the number of outlets going from 24,000 to 34,000. Global geopolitics are increasingly playing a role in consumer choice. Public relations company Edelman’s latest Trust Barometer report found that nearly eight out of 10 consumers in Saudi Arabia said they now more often buy home brands instead of foreign brands. Joe Abi Akl, head of Oliver Wyman’s retail and consumer practice for India, the Middle East and Africa nonetheless said Saudi Arabia was a huge market opportunity: “By developing and deploying the right strategy… retailers can find niche areas of the market for expansion.”
