KPMG's 2016 UAE Food and Beverage Report has found that when it comes to planning what to do over the weekend, two out of three UAE consumers choose to eat out. In addition, five out of six respondents are eating out at least as much as last year, with a third of respondents indicating that they are eating out even more frequently in 2016. Further, nearly two-thirds of respondents are spending more than last year.
Interestingly, the report also found that brunch continues to remain a UAE institution, with 66 per cent of respondents indicating that they eat brunch at least once a month. Also, 44 per cent of respondents eat lunch out or get a takeaway - about the same as those who bring a packed lunch from home. Food preferences, on the other hand, were much the same as last year with Indian, Arabic, and Italian cuisines topping the charts. Quick service restaurants (QSRs) and cafes remained the most popular formats - suggesting that speed and value for money rank very high with customers.
The report also found that there is a consistency in the way consumers chose restaurants - once again, they rated quality of food and service and their favoured cuisine as the key factors determining the choice of restaurants. Consumers indicated that travel time is not a key consideration when choosing restaurants. Nearly two thirds of survey respondents are willing to travel for more than 20 minutes to get to their choice of restaurant.
While the UAE's food and beverage market may have been impacted by changing macro-economic conditions, the sector continues to benefit from the UAE's positioning as a major global tourism and retail destination with opportunities for new concepts and restaurant formats.
Anurag Bajpai, partner and head of retail for KPMG in the lower Gulf, said: "The UAE is a dynamic F&B market with a growing number of exciting concepts, cuisines and restaurant formats, all of which are constantly vying for space. Despite market challenges, the UAE's F&B market has remained resilient."
Bajpai also noted that to stay successful in the longer term, F&B operators must get the basics right - from identifying the right concept to delivering high-quality food and service. Operators need to engage with their customers through the effective use of social media and data and analytics to stay relevant, he said.
The UAE is one of the world's leading F&B markets, with a market size measured by Euromonitor at Dh52.4 billion in 2015. Recent Euromonitor data suggests that growth in revenue between now and 2020 is likely to outstrip growth of outlets by around 30 per cent. Some of this is predicated on continuing strong tourism growth in the UAE in the run-up to Expo 2020.
Food festivals, particularly in Dubai and Abu Dhabi, continue to grow in popularity, with operators welcoming a growing interest in different cuisines and noting festivals give them a platform to experiment with new concepts. Despite the UAE's reputation for glitz and glamour, only a third of respondents felt that a Michelin star influenced their decision to dine at a particular restaurant. Both consumers and operators suggest that the highest end of the market remains somewhat protected from the short-term challenges reported elsewhere.
"The UAE remains a very exciting market for F&B operators, with 64 per cent of operators surveyed indicating that they are looking to expand their footprint. The positive longer term outlook means continued investment and an increasing number of outlets, brands and concepts - all of which is good news for customers," Bajpai added. "However, operators may need to be reminded that simply focusing on geographical expansion could be unsustainable. The quality and appeal of the concept is what will ultimately determine success."
KPMG also indicated that reviews, whether personal recommendations or online ratings, strongly influence behaviour. Word of mouth is by far the most important influencer, while about 40 per cent of respondents rated feedback from friends and family as the top influencer. Over 80 per cent of respondents said such feedback was one of the top three influencers when weighing up a new restaurant. Just under half of respondents look for online reviews. This underlines the need for proactive customer engagement at all times.
Business2 days ago