Food and beverage delivery services may have a negative impact on the UAE food and beverage sector. Companies such as Uber Eats and Fetchr are poised to thrive, giving serious competition to restaurants and traditional food and beverage delivery options.
Growth in the UAE’s food and beverage sector has outpaced its demand for a significant period of time, with sales for many businesses stagnating or declining entirely. Though the market has been relatively resilient, it does not necessarily offer new business ventures the opportunity to thrive. High rent and wages, high staff turnover, and price-sensitive consumers are some of the key challenges that this market is currently facing. These issues are only increasing as delivery companies move in, offering the option of online food orders, which allow consumers to compare prices and restaurants before ordering. These companies are also creating new food industry jobs in UAE and can afford to pay their workers competitively.
Demand for rapid delivery services for UAE food
KPMG’s annual food and beverage survey found that three out of every four people in the UAE order takeout or have food delivered at least once a week, with preferences for food delivery increasing fairly rapidly. Traditional restaurants have begun offering their own delivery services, but ultimately face challenges competing with the large workforce and transportation methods offered by big food and beverage delivery service providers. Food delivery is increasingly moving online, something that is hurting smaller restaurants in Dubai, Abu Dhabi, and other major cities in the UAE who do not have the capacity or employee base to keep up with online food orders. As one major food tech player in the UAE reported to KPMG, nearly 20 percent of orders channeled through their platform are now done online.
Many restaurants in the region are now incorporating food delivery services and food apps into their business operations to stay competitive in the UAE food industry. Consumers in most major cities can now book restaurant reservation through these apps in addition to ordering home delivery—according to KPMG’s survey, more than 82% of UAE food and beverage companies were listed on delivery service apps. Those who do not offer delivery risk being left behind by consumers.
Vendors in the UAE food and beverage market will have to adapt further to continue making profits and remain competitive. Partnering with food delivery services can ultimately help them to generate more revenue and attract a wider consumer base—however, the impact that this will have on the success of the market as a whole remains to be seen.
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