UAE restaurant revenues decline as demand grows says new report

Posted under Catering News ME, F&B, News.
by Crystal Chesters | Published 4 years ago

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The KPMG 2016 UAE Food & Beverage Report, released today, has revealed that while consumers are eating out and spending more, restaurant operators are seeing a decline in revenues.

(L-R) Anurag Bajpai, partner and head of retail, KPMG  and Vikrant Rohatgi, director, deal advisory, KPMG

(L-R) Anurag Bajpai, partner and head of retail, KPMG and Vikrant Rohatgi, director, deal advisory, KPMG

According to the report, 63% of consumers are spending more than last year, while for 28% of respondents, there has been no change in spend. Just 9% said they were spending less than last year.

Speaking at the report launch, Anurag Bajpai, partner and head of retail, KPMG said: “Operators are finding the market to be challenging, but consumer demand continues to grow.

“Sixty-seven percent of survey respondents eat dinner out every weekend, 44% eat lunch out or get a take away, 66% each brunch at least once a month and three out of four order a takeaway at least once a week.”

However, despite the market growing overall, 64% of operators surveyed indicated that the same store sales over the past 12 months have either been stagnant or have declined.

The challenges for F&B operators highlighted in the report include increased rental costs, a race for space, topline growth, rising food costs and increased attrition of trained staff.

The report shows that as the market grows, the UAE in general and Dubai in particular continues to attract more competition and for individual operators this means a struggle for footfall and revenue.

Bajpai explained: “Operators are saying that in the past 12 months, they have seen stagnation in same store sales, but on the other hand you have consumers spending more. The answer goes back to increased competition – you have more restaurants.

“The market is growing but at this point in time, the rate of supply is more than the increase in demand so operators are getting a smaller share of the pie, and that’s where the challenge is.”

The KPMG 2016 UAE Food & Beverage report was collated from a survey of 850 consumers and 12 F&B operators in the UAE from a cross section of categories, including quick service, casual and fine dining.

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