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Fast food outlets feeling the pinch
Normally bustling with those seeking instant culinary gratification, the UAE's fast foods outlets have taken on an air of eerie silence during Ramadan.
- By Robert Ditcham, Staff Reporter
- Published: 00:00 October 7, 2006
- Traditional fast food outlets stand to face increased competition from companies billing themselves as both fast and health conscious.
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Dubai: Normally bustling with those seeking instant culinary gratification, the UAE's fast foods outlets have taken on an air of eerie silence during Ramadan.
Officials running the country's 315 fast food restaurants will expect business as usual when the festival of Eid signals the end of fasting.
But are this month's shorter evening queues and lower sales volumes a sign of things to come?
According to retail analysts, traditional fast food outlets stand to face increased competition from companies billing themselves as both fast and health conscious, all eager for a slice of the UAE's $117 million fast food market.
Already European and US consumers are opting for what are considered healthier alternatives to the fare sold by Hardees, McDonald's, Burger King and KFC.
"As the Dubai population becomes increasingly geared towards the western ex-pat market there maybe a shift away from fast food as we know it and more towards a healthier fast food," said Neil Tunbridge, head of retail services at Dubai-based GRMC.
Piyush Mathur, regional manager at analysts ACNielsen, said the growth of fast food outlets in the UAE from 275 in 2003 to 315 this year "has not been significant" owing to greater awareness of health and nutrition.
"Concerns over health and obesity have become a widespread in the UAE, forcing fast food chains to introduce more innovative products," he said. "It is doubtful that we will see their sales rise significantly over the next few years."
The UK has already seen brands such as Pret a Manger, which bills its sandwiches and soups as an alternative to burgers and fries, become a hit. The sandwich chain turns over approximately £150 million a year from its 150 outlets. Meanwhile, chains including Yo! Sushi, Gourmet Burger and Australian brand Sumo Salad have either been introduced to the UAE or are on their way.
Since 2000, fast food mania has swept across the UAE.
Longer hours and increasing numbers of working women means less time preparing fresh, healthy f meals for the family
New figures supplied by market research company TNS show that 26 per cent of UAE residents eat out at a quick service restaurant (qsr) at least once a week. The frequency of visits to a QSR is much higher among Emiratis and expat Arabs at 65 per cent.
Fully aware of the market potential, McDonald's, which has opened 43 restaurants in the UAE to date, introduced several meals directly targeting the Middle East market, such as the McArabia grilled kofta and grilled chicken. The company's August sales in Asia/Pacific, Middle East and Africa, were up 6.1 per cent.
But the UAE's penchant for fried food has also led to expanding waistlines. Studies at the turn of the century revealed that approximately 20 per cent of the population suffer from obesity a higher rate than the US.
Despite growing health awareness, experts say there is still immense scope for growth in the UAE's fast food market.
Tunbridge said Gross Leasable Area (the retail area which is available to let to tenants) per capita in the UAE is currently around the 0.98 mark, based on square metre figures.
He added: "When you compare this to the US average of about 1.8 to 1.9 you can see there is plenty of room for mall and non-mall retail growth and therefore plenty of room for growth of fast food chains."
"It can be said with some confidence that the future room for growth in this market will follow the future growth trend of the malls," he said.
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