Mall proprietors in Saudi Arabia hasten to incorporate 'experiences', including art exhibits, to entice customers
In the heart of the Middle East, Saudi Arabia is rapidly becoming a hub for global brands seeking to establish a footprint in the region. According to Konstantinos Papadakis, Associate Partner - F&B Consultancy at Knight Frank's MENA division, the Kingdom is fast becoming a key location for these brands.
This transformation is evident in the growing trend of designer cafes such as the Dior Café pop-up in Riyadh and Ralph's Coffee. These establishments, along with iconic retail outlets and high-end dining, are placing Saudi Arabia at the forefront of lifestyle retail.
The Kingdom's retail sector is experiencing robust growth, and this trend is expected to continue, as stated by Jonathan Pagett, Partner - Head of Retail Advisory, MENA for Knight Frank. To maintain strong performance and high retail sales densities, creating unique retail offers with new-to-market concepts is critical.
Mall owners in Saudi Arabia are not resting on their laurels. They are creating better experiences around outdoor spaces, bringing in art installations, and hosting interactive exhibits and events. This approach is attracting visitors for shopping, socializing, entertainment, and events.
Dubai's business group, Al-Futtaim, is one of the key players investing billions to acquire a stake in Saudi entity Cenomi Retail. This move will expand luxury and designer café concepts in Saudi Arabia, including openings like Dior Café and Ralph's Coffee in Riyadh. Other UAE and Gulf investors are also entering the Saudi luxury F&B and retail market to capitalize on growing demand and tourism.
Saudi Arabia is not just building new shopping destinations but also reworking older malls to meet current needs. The lifestyle retail space in Riyadh and Jeddah is set to increase nearly 600,000 square meters to 1.31 million square metres by 2027.
Competition is fierce across the Kingdom, with a strong pipeline of projects in Riyadh, Jeddah, and Al Khobar. However, retailers in the Saudi retail sector are rushing to find new ways to keep the growth going. As Faisal Durrani, Partner - Head of Research for MENA markets at Knight Frank, stated, lifestyle destinations have become more than just malls - they are vibrant community hubs.
The luxury retail and hospitality sectors are flourishing in Saudi Arabia, making it a key location for global brands seeking to establish a footprint in the Middle East. Mall developers in the Kingdom are busy adding new experiences to their locations to attract more visitors. Even the return of cinemas in the recent past has benefitted Saudi Arabia's malls significantly.
As shoppers become more selective and seek out more engaging experiences, retailers in Saudi Arabia are responding with innovative and immersive offerings. From designer cafes to experiential venues, Saudi Arabia's retail sector is shaping up to be an exciting destination for both locals and tourists alike.
