{"id":98289,"date":"2025-06-30T00:00:00","date_gmt":"2025-06-30T00:00:00","guid":{"rendered":"https:\/\/enterpriseam.com\/ksa\/2025\/06\/30\/retail-sector-to-undergo-consolidation-in-wake-of-grocery-product-ban-bmi\/"},"modified":"2025-06-30T00:00:00","modified_gmt":"2025-06-30T00:00:00","slug":"retail-sector-to-undergo-consolidation-in-wake-of-grocery-product-ban-bmi","status":"publish","type":"post","link":"https:\/\/enterpriseam.com\/ksa\/2025\/06\/30\/retail-sector-to-undergo-consolidation-in-wake-of-grocery-product-ban-bmi\/","title":{"rendered":"Retail sector to undergo consolidation in wake of grocery product ban -BMI"},"content":{"rendered":"

<\/strong>Are small<\/strong> Saudi grocery stores in for consolidation? <\/strong>The Kingdom\u2019s recent ban on small shops selling key goods \u2014 including tobacco, dates, meat, fruits, and vegetables \u2014 is expected to trigger consolidation in the fragmented retail market, according to a note<\/a> by Fitch Solutions\u2019 BMI. The expected consolidation comes amid efforts to improve food safety, supply chain efficiency, and tax compliance.<\/p>\n

The reforms are expected to see supermarkets expand their share in the Kingdom\u2019s retail market<\/strong>, currently standing at third (compared to 55% in the UAE). The reforms could also help minimize hidden foreign ownership in the retail market, which is reportedly dominated by Indians representing 75% of employees, according to the note.<\/p>\n

The decision creates new space for <\/strong>real estate developers, logistics firms, and e-grocery platforms to grow<\/strong>, especially in underserved areas. Larger retailers like Al Othaim Markets, BinDawood Holding, Panda Retail, Carrefour, and LuLu will be well-placed to expand due to the increased footfall into larger supermarkets, expected to gain a bigger share of household spending on food, which accounts for nearly a fifth of Saudi household budgets in 2025.<\/p>\n

IN CONTEXT-<\/strong> New rules were issued last week<\/a> by Municipalities and Housing Minister Majid Al Hoqail barred small grocery shops \u2014 under 100 sqm \u2014 from selling these goods, allowing their sale only at supermarkets and hypermarkets, with meat sales requiring a separate license. The rules come with a six-month grace period for existing grocery stores to adjust.<\/p>\n

ALSO- <\/strong>Minimum size requirements for different types of stores were introduced, setting 24 sqm for groceries, 100 sqm for supermarkets, and 500 sqm for hypermarkets. <\/p>\n

DATA POINTS-<\/strong> Saudi households\u2019 spending on food and drinks through large-scale retailers is expected to grow 6.2% this year to about SAR 343 bn (USD 19.4 bn), with growth extending over the medium term at an average rate of 6.1% to reach SAR 433.5 bn (USD 116 bn) by 2029, BMI notes.<\/p>\n","protected":false},"excerpt":{"rendered":"

The shift opens doors for big retailers, delivery apps, and real estate developers<\/p>\n","protected":false},"author":1,"featured_media":98290,"comment_status":"","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"newspack_ads_suppress_ads":false,"newspack_popups_has_disabled_popups":false,"newspack_sponsor_sponsorship_scope":"","newspack_sponsor_native_byline_display":"inherit","newspack_sponsor_native_category_display":"inherit","newspack_sponsor_underwriter_style":"inherit","newspack_sponsor_underwriter_placement":"inherit","ep_exclude_from_search":false,"_primary_brand":0,"newspack_featured_image_position":"","newspack_post_subtitle":"","newspack_article_summary_title":"Overview:","newspack_article_summary":"","newspack_hide_updated_date":false,"newspack_show_updated_date":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[2671],"tags":[10,211],"brand":[],"newspack_spnsrs_tax":[],"class_list":["post-98289","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-retail","tag-enterpriseam-ksa","tag-retail","wpautop","entry"],"acf":{"mongo_id":"6b8d15c3-a344-4104-a1b3-ec6a7b78df4a","order":"8","is_powered_by":false,"story_type":"1","photo_url":"https:\/\/ent.news\/2025\/6\/1663.jpg","photo_position":"above","homepage_title":"","full_issue_title":"Retail sector to undergo consolidation in wake of grocery product ban -BMI","related_issue":[98275],"teaser":"The shift opens doors for big retailers, delivery apps, and real estate developers","voice_url":"https:\/\/s3.us-east-1.amazonaws.com\/ent.news\/audio\/2025\/6\/.ada74bef-f5d0-436c-a1cc-96f6f5df61bc.mp3"},"yoast_head":"\nRetail sector to undergo consolidation in wake of grocery product ban -BMI - 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