UAE retains taste for dining out

dubai - Lunch and dinner take the lion's share of consumer spending

Dining out in the UAE has been more or less stable in 2017. On average, residents spent between Dh50 and Dh150 per outing, with lunch and dinner taking the lion's share of consumer spending, says a new report.

Since the UAE is home to more than 200 nationalities, the residents enjoy varieties of cuisines such as Indian, Italian, Continental and Arabic.
According to global consultancy KPMG's 2017 UAE F&B report, Italian and Lebanese cuisines have taken over Indian food in terms of wider popularity this year as compared to last year.

The trends in frequency of eating out and average spend have broadly remained consistent over the past years, the report said.

"Lunch and dinner are the most frequently eaten-out meals, albeit for differing reasons. While convenience drives eating out for lunch, dinners are more about experience and socialising. Similarly, consumers tend to spend more on dinners and brunches when compared with other meals; breakfasts are usually light on the consumer's wallet," Anurag Bajpai, partner, audit, KPMG, said.

Both takeaway and delivery are witnessing a rise as an increasing number of consumers prefer the convenience of ordering in and enjoying greater choice, according to KPMG.

Given the high mall density in the UAE, Vikrant Rohtagi, director, deal advisory, KPMG, said it is no surprise that restaurants and food courts within these complexes are the most preferred locations for eating out.

Nearly three out of four UAE consumers eat out at outlets within malls at least once a month.

According to KPMG analysts, operators have tried to maintain prices to the extent that it does not hurt their business and have selectively increased prices through a mix of menu refreshes and price increases on specific items during 2017.

Despite such efforts, these changes have not gone unnoticed as consumers believed they were currently spending much more when they eat out compared with last year.

"An overwhelming 78 per cent of the consumers felt it has become more expensive to eat out over the last 12 months. As a consequence, they are attempting to modify some of their eating-out habits. They are more aware of what they order or opt for more affordable options. Some consumers have also cut down on their frequency of eating out," said Bajpai.

Commenting on the impact of value-added tax (VAT) on dining which will be taxed at five per cent from January 2018, Bajpai noted that operators are wary of increasing menu prices as it is likely to hurt sales.

"At the same time, they are reluctant to absorb VAT as it would further reduce already suppressed margins. Some operators are looking to move early and use a combination of menu refreshes, price increases on selective items and combo offers to prepare themselves while maintaining the consumer's perception of value. Others prefer to wait and watch before deciding on their course of action," he said.

- waheedabbas@khaleejtimes.com