News and Insights 2026

Saudi Arabia’s expanding lifestyle retail market is creating new opportunities for food and beverage operators, as developers increasingly integrate restaurants, cafés, entertainment and leisure into destinations designed to attract visitors and encourage longer stays.

F&B has become particularly prominent in Riyadh’s lifestyle retail sector, where operators account for around 76% of tenants, according to Knight Frank’s Saudi Arabia Retail Market Overview – Summer 2026.

The capital now has more than 434 restaurants and cafés across 28 lifestyle retail developments, which together comprise approximately 485,000 sqm of space. Average occupancy across these developments stands at 96%, highlighting the strength of the lifestyle-led retail segment.

Jeddah is also seeing significant expansion. The city currently has around 291,000 sqm of lifestyle retail across 19 developments, with a further 277,600 sqm expected to be delivered by 2029.

New waterfront, mixed-use and community-oriented developments are broadening the city’s retail landscape, with hospitality, dining, leisure and entertainment increasingly forming part of the overall destination mix.
 

F&B takes a bigger role in retail

Restaurants and cafés are becoming increasingly important components of Saudi Arabia’s retail destinations as developers look beyond traditional shopping to attract consumers.

Demand is growing for health-focused dining concepts, convenience-led restaurant formats and affordable casual dining, reflecting evolving consumer preferences across the Kingdom.

At the same time, restaurants, cafés, entertainment, wellness and leisure facilities are being incorporated more closely into retail developments to increase footfall and dwell time.

The trend is visible across both conventional shopping centres and newer lifestyle developments, where F&B is increasingly being positioned as a destination driver rather than simply a supporting retail amenity.

Consumer spending reaches SAR 425bn

The evolution of the F&B and retail landscape comes against a backdrop of continued consumer spending growth.

Total spending through point-of-sale transactions, e-commerce purchases and cash withdrawals reached SAR 425 billion in the first quarter of 2026, an increase of 6.8% year-on-year.

The rise follows a record SAR 1.57 trillion spent through official payment channels during 2025.

Saudi Arabia’s wider economic environment also remained supportive during the first quarter. The economy expanded by 3%, driven in part by 2.9% growth in non-oil activities, while inflation stood at 1.8%.

Digital spending recorded particularly strong growth. E-commerce purchases increased 42% year-on-year to SAR 98.4 billion, while POS spending rose 4.4% to SAR 189.7 billion.

Cash withdrawals declined 7% to SAR 136.8 billion, reflecting the continued shift towards cashless payments and omni-channel shopping.

Discretionary retail categories also recorded strong POS growth. Jewellery spending increased 47%, clothing and accessories rose 25.9% and telecommunications climbed 23%.

Major retail markets maintain high occupancy

Retail fundamentals remained broadly stable across Saudi Arabia’s three largest metropolitan markets during the first half of 2026.

Riyadh has approximately 4.2 million sqm of retail stock. Occupancy remained at 91%, while average lease rates for regional and super-regional malls increased 1.2% year-on-year to SAR 2,650 per sqm.

Jeddah has around 3 million sqm of retail stock, with occupancy improving to 88% despite a modest easing in headline rents as new supply entered the market.

The Dammam Metropolitan Area has approximately 1.4 million sqm of retail stock, with occupancy increasing to 94%.

Further retail supply is expected across the Kingdom’s major urban centres, with much of the development pipeline increasingly focused on mixed-use, lifestyle-led and destination-oriented projects that combine retail with F&B, hospitality, entertainment and leisure.

For F&B businesses, the direction of Saudi Arabia’s retail market points to an expanding role for restaurants and cafés within these destinations. As more projects are designed around shopping, dining, entertainment and social experiences, F&B is becoming an increasingly important part of how retail developments attract consumers and generate footfall.