- GulfHost Restaurant Development Conference panellists acknowledge innovation and value factor as top of the agenda for operators and consumers
A four-strong panel of regional F&B hospitality leaders believe UAE-based restaurant and food delivery operators must embrace innovation or face extinction in the country’s increasingly competitive F&B landscape.
Speaking in the first panel discussion at the GulfHost Restaurant Development Conference – ‘UAE – A case of oversupply? Is there still a market?’ – the panellists took to the stage following a keynote address by Duncan Fraser-Smith, Director – Global Food & Beverage, The First Group.
“While there is arguably oversupply in certain areas, predominantly high-end dining, the key growth sectors in quick-service restaurants and homegrown casual-to-mid-casual outlets still represent huge opportunities, particularly in Kuwait, UAE and Saudi Arabia,” said Fraser-Smith. “The UAE alone currently has over 16,000 F&B outlets, a number expected to grow to 19,000 by the end of 2019.”
According to hospitality consultants Thomas Klein International, Dubai is home to 2,968 restaurants per every million people, compared with other global cities such as Paris, which has 3,514 restaurants per every million people, New York at 3,115, and London at 3,005. Although the panellists raised question marks surrounding what percentage of Dubai’s multinational resident demographics are truly target customers in comparison with other global cities, they universally agreed further growth will be driven by innovation.
“On average in the UAE, we still eat out more than other regions, so operators need to ensure there is value at every price point. There is a growing demand for mid-market or casual dining but, even there, only the strong will survive,” said Emma Banks, Managing Director, JRG Dubai, the emirate’s leading homegrown restaurant management company.
“Fine dining is a market you go into at your peril. People now want experience, they want a concept where there are multiple experiences on offer and mid-market options cater to that. Operators need to innovate to compete in such a trend-focused market. If you want to be a successful operator, you need to understand the preferences that are driving consumers’ choices – operators must look within themselves,” she added.
Naim Maadad, Chief Executive Officer, Gates Hospitality, agreed that the mid-market segment remains a lucrative option, stressing however, that operators need higher volumes of potential diners to be able to compete: “Fine dining is not a commercially viable business anymore, the market is simply over-saturated. People are not eating out as much as they were a year ago, so we need masses – we need more footfall.”
As more and more UAE-based restaurants look to the country’s burgeoning delivery segment to offset in-restaurant revenue pressures, the delivery segment is expected to continue providing a fiscal boon to operators that embrace innovative diversification.
“The mid-market category is undoubtedly far more appealing to the majority of Dubai’s demographics. Lots of casual dining outlets now offer a delivery product that is comparable to an in-restaurant food experience, so that segment is expanding rapidly and the outlets doing it well are those that are trying to do something a little differently,” agreed Chris Daniels, COO, Freedom Pizza, which operates a model based on 95 per cent delivery.
With Fraser-Smith referencing the portmanteau concept of ‘retailtainment’ in his keynote, Anoop Gopal, Director – Real Estate & Property, Kuwait Food Co. (Americana), underlined that mall operators are allocating greater areas of space to F&B anchor tenants. With tourism expected to boom ahead of Expo 2020 Dubai, Gopal is optimistic the city is readying to welcome even greater numbers of people to its hotels, restaurants and cafes.
“Delivery is a huge area of growth for quick-service restaurant operators, but we need new, value-driven, mid-market concepts that blur the line between food and entertainment – that is what global trends tell us,” said Gopal. “Operators that do not innovate will lose, simple as that.”
The GulfHost Restaurant Development Conference is part of the extended programme at GulfHost 2018, the complete hospitality equipment sourcing expo for the Middle East, Africa and Asia, which runs at DWTC from October 30 to November 1. The second edition of the annual event is twice as large as its debut run in 2017 and counts 2,500 brands and more than 8,000 products across six core sectors, including the new Gelato & Bakery, Café & Counter and HORECA zones. GulfHost 2018, which is co-located with DWTC’s annual trio of niche food shows, is set to draw upwards of 25,000 buyers.Email This Post