The Middle East has established itself as a gastronomic hub with some of the best restaurant concepts in the world and well-known international chefs. The industry has recalibrated itself post-COVID-19, restaurateurs are emerging stronger with sustainable & innovative business models. With the opening up of the economy, and the upcoming mega-events like the Dubai Expo 2020, T20 World Cup, Abu Dhabi Grand Prix, and the FIFA World Cup Qatar 2022are set to revive the food & beverage industry.
Uncovering the emerging trends and the growth drivers of the Middle East restaurant industry, POSist, a leading cloud-based restaurant technology platform in collaboration with Dubai Restaurants Group (DRG), a not-for-profit organization – under the direct patronage of the Dubai Chamber of Commerce, today released the PRIME (POSist Restaurant Industry & Market Evolution) Report Middle East Edition titled ‘Post-COVID EXPO 2020 & Beyond’. The PRIME report examines the trends emerging in the restaurant industry, including technology, new business models, kitchen operations, menu trends, and more.
Expo 2020 Raises Hope and Confidence
There are high expectations from events like Expo 2020, T20 World Cup, and FIFA World Cup Qatar 2022 to improve footfall and tourism. However, restaurant chains do not anticipate heavy marketing spending on promotional campaigns around the events, as their primary focus remains on improving margins and regaining lost business. Other key takeaways include:
- 87% of respondents expect Expo 2020, T20 World Cup, and FIFA World Cup 2022 to impact the duration of these events positively
- Nearly 30% of restaurant operators said they plan to spend marketing dollars on promotional campaigns around these events.
As Diners Return, Restaurants Face Challenge in Hiring
Despite a slowdown in business for a brief interval, employment opportunities are back on track. Most operators across fast-casual, fine dining, and cloud kitchens say they have job openings they’re finding hard to fill. In addition, restaurant operators take other steps to prepare themselves for the season of peak demand. The report highlights
- Nearly 55% of respondents said that hiring staff is their top priority to manage the sudden rise in the footfall of diners and orders.
- Further, 46% of operators upgrade their interiors to improve ambiance, and 34% said they had devoted more resources to creating outdoor dining spaces for the winter season.
Hybrid Business Model to Create New Revenue Streams
Though revenues in restaurants are returning quicker than expected, online delivery is still a significant part of its revenue. Restaurants are exploring ways to control their operating expenses, such as rentals and staffing costs. In times like these, a hybrid business model that uses a combination of cloud kitchen delivery and hero stores is a viable option to maintain a balance of dine-in and delivery business.
- 65% of respondents expressed interest in setting up a cloud kitchen, also known as dark, satellite, virtual, or ghost kitchens
- 42% of restaurant operators are exploring opening a new location, and nearly 34% of respondents shared they are setting up online ordering via their website, social media channels, or mobile app
Restaurants Top-up Menu with Healthier Diet
As the restrictions have reduced and consumers have started going out, restaurant operators are gearing up to add more items to their menu in the coming months. One of the most consistent long-term food trends has been the increased visibility and consumer demand for sustainable and perceived-healthier food.
- 65% of operators say they have added more items to their menu, while 25% have about the same things on their menu, and 10% have reduced their menu items
- As high as 79% of restaurants shared that healthier food choices are preferred by customers, followed by 73% stating customers are open to takeaway and food delivery.
Restaurants opt-in D2C (Direct to consumer) Channels to Grow Orders
This hints that as food delivery proliferates, consumer behaviour is changing and perhaps to the advantage of the restaurant operator. As consumers become more familiar with delivery and ordering online, they’re more likely to choose a direct channel to order from the brand. The report highlights the rising role of social media channels to create new avenues for ordering food.
- 93% of restaurant operators shared they actively use Social media like Instagram, Facebook, and Twitter to run promotional campaigns
- 32% of operators shared they are actively running digital marketing campaigns for promotion, followed by 26% who shared they have invested in influencers marketing on platforms like Instagram and Facebook.
“With 2021 behind us and vaccines rolling out across the Middle East, we can start to see the end of this pandemic. Our research and analysis of the restaurant industry unveil three innovation areas that will set the tone for 2022. These areas include online ordering, menu optimization, and a hybrid business model that will change the way restaurants operate.
In the PRIME (POSist Restaurant Industry & Market Evolution) Middle East edition, we look at a broader view of how the restaurant industry is gearing up for growth alongside significant events in the region, such as the ongoing Expo 2020 and upcoming sporting events like FIFA World Cup Qatar 2022 and the boost in Kingdom’s tourism sector,” Ashish Tulsian, Co-Founder & CEO of POSist.
“Incredibly proud to be associated with such an initiative that would drive the industry forward in the times ahead with clarity and focus. I take this opportunity to thank you for your contribution and for being part of this unique, trendsetting exercise that would benefit one and all associated with the culinary industry,” Naim Maadad, Founding Board Member, Dubai Restaurants Group.