Dubai: The UAE’s food and beverage sector seems to be in for a second wave of high-degree growth as new retail concepts come to market – and with global and local brands intent on expansion.
This week, Dubai Festival City confirmed the Middle East’s biggest food hall will be ready by December. And not just any other food hall either, with the mall operator jazzing up the entertainment quotient to add to the F&B options served up.
Individual F&B brands too are feeling the pull of demand, and plan to get cracking with all available expansion options. There’s Five Guys, the niche hamburger chain, slicing and dicing its way to 16 outlets in the UAE next year. It currently has 12.
The current growth for the UAE F&B industry also comes with other perks, says a top official at Five Guys’ local operations, which is licensed by Shamal Holding. F&B businesses seem to have finally come to grips with the surge in inflation-related costs that had been stalking them for nearly three years, as food commodity prices shot up.
“Right now, our cost of business is actually running lower than what we had forecast for 2023,” said Sudhin Siva, VP for Commercial Operations, Five Guys UAE. “The global supply chain pressures of 2022-21 are no longer there – and that’s mostly from the revised arrangements we had with our suppliers. That brought down the costs, more than we initially thought.
“At the same time, there is this demand in Dubai and in the UAE for special F&B experiences – by that I mean through physical outlets. It’s an opportunity for international and local brands to cash in on.
“We intend to see the same control on our costs through the rest of 2023 and even into 2024.” (On rental costs too, F&B businesses say that some stability is being recorded in landlord demands. But as with residential rents, retail rents too had seen upward mobility in the recent past.)
Stick with the menu
Five Guys recently opened a presence in Sharjah and is doing so now at Galleria Mall in Al Barsha.
Siva says the brand did not opt for heavy local sourcing of its supplies to beat the inflation spike.
We remain consistent with the Five Guys’ sourcing framework, but as I said, we derived better benefits from the commercial arrangements.
The brand does not plan to go for a major makeover of its menu either, to try and fit in local iterations as some other global F&B quick-service entities have done. “That’s not the Five Guys’ way,” said Siva. “To be honest, we have not seen the need to and our customers prefer it that way. The only marked difference is using halal meat.” (Of course, Five Guys’ outlets everywhere stick to the ‘no microwave, no freezer’ policy.
More UAE openings?
Reaching 16 next year takes Five Guys closer to the ‘18-20’ needed to cover the UAE. The brand is definitely not seeking visibility in every other location. “When we are trying to secure locations, landlords recognise what we could bring to their destinations,” said Siva. “But we will remain selective.”