Saudi Arabia Retail Market Segmented, By Type (Food Retail, Non-Food Retail), By Retail Store Type (Supermarket/Hypermarket, Online, Baqala Stores, Departmental Stores, Exclusive Stores, Convenience Stores, Others), By Region, Competition, Forecast & Opportunities, 2020-2030F

Market Overview

The Saudi Arabia Retail market was valued at USD 268.56 Million in 2024 and is expected to grow to USD 398.45 Million by 2030 with a CAGR of 6.80%. The Saudi Arabia Retail market is experiencing robust growth, driven by several key factors. Rising disposable incomes and a young, tech-savvy population are fueling increased consumer spending across various retail segments. Rapid urbanization and the expansion of modern infrastructure, including shopping malls and e-commerce platforms, are enhancing retail accessibility and convenience. Also, the government’s Vision 2030 initiative is playing a pivotal role by encouraging economic diversification and attracting foreign investment into the retail sector. The shift toward digitalization, with a surge in online shopping and mobile commerce, is also transforming the retail landscape. Evolving consumer preferences for global brands, healthier lifestyles, and premium products further stimulate market development. Together, these drivers are reshaping Saudi Arabia's retail sector into a dynamic and competitive environment.

Key Market Drivers

Rising Tourism Sector Across the Region

The rising tourism sector across the region is playing a pivotal role in driving the growth of Saudi Arabia's retail market. As a part of this, according to a recent study, as of 2022, Saudi Arabia welcomed approximately 18 million international tourists, marking a substantial rise compared to the previous year. As the Kingdom continues to attract a growing number of international and domestic tourists, retail spending has seen a significant surge. Tourists contribute to increased demand for luxury goods, fashion, souvenirs, and electronics, particularly in major urban centers and tourist destinations. Large-scale projects such as entertainment zones, heritage sites, and beachfront resorts are drawing visitors, thereby boosting footfall in retail outlets. Events, festivals, and seasons like Riyadh Season further elevate retail activity by attracting high volumes of shoppers. Also, infrastructure development and improved connectivity support the influx of tourists, enhancing access to retail zones. The government’s focus on tourism as part of Vision 2030 ensures ongoing investment in the sector, creating a ripple effect that stimulates retail sales and positions Saudi Arabia as a leading retail and tourism destination.

Surging Middle-Class Population

The expansion of Saudi Arabia's middle class is a significant catalyst for the country's retail market growth. As a part of this, according to a recent study, as of 2024, Saudi Arabia led the Middle East with the largest proportion of middle-class and higher-income consumers, where this segment accounted for 100 percent of the consumer base. As more citizens attain higher education and stable employment, their disposable incomes increase, leading to elevated consumer spending. This demographic shift has heightened demand for a diverse array of products, from everyday essentials to premium goods. Retailers are adapting by offering value-for-money options and expanding product lines to cater to the evolving preferences of this burgeoning consumer base. The middle class's growing appetite for quality and variety is also driving the proliferation of modern retail formats, including shopping malls and e-commerce platforms. Also, their digital savviness is accelerating the adoption of online shopping, prompting retailers to enhance their digital presence. Government initiatives under Vision 2030, aimed at economic diversification and enhancing living standards, further support this trend by fostering an environment conducive to retail sector growth. Collectively, these factors underscore the pivotal role of the surging middle-class population in shaping Saudi Arabia's dynamic retail landscape.

Expansion of Retail Sector

The expansion of Saudi Arabia's retail sector is fueled by a confluence of strategic initiatives and evolving consumer dynamics. As a part of this, as of April 2025, Chalhoub Group has launched an extensive portfolio of prestigious brands at Solitaire, creating a retail space that blends heritage, innovation, and exclusivity. The grand opening of joint venture brands such as Loewe, Celine, Fendi, Dior, Dior Beauty, Louis Vuitton, Louis Vuitton Jewellery, Sephora, Guerlain, Chaumet, Tiffany & Co., and Ray-Ban represents a significant milestone in the Group’s collaborative growth strategy. Government-led reforms under Vision 2030 are pivotal, aiming to diversify the economy beyond oil dependence and fostering a conducive environment for retail growth. This includes significant investments in infrastructure, such as the development of modern shopping malls and lifestyle-oriented retail spaces, enhancing consumer experiences. The rise of e-commerce, propelled by increased digital adoption and a young, tech-savvy population, is reshaping retail channels and broadening market reach. Also, the integration of entertainment and retail, exemplified by lifestyle-led developments in cities like Riyadh, is attracting higher footfall and consumer engagement. The influx of international brands and the growing preference for premium products among consumers are also contributing to the sector's dynamism. Collectively, these factors underscore the robust expansion of Saudi Arabia's retail market, positioning it as a significant player in the regional retail landscape.

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Key Market Challenges

Supply Chain Constraints

Supply chain constraints present a significant challenge to Saudi Arabia's retail market, impacting efficiency, cost structures, and customer satisfaction. The Kingdom's vast geography and dispersed urban centers complicate logistics, making timely distribution to remote areas difficult. This is exacerbated by a shortage of warehousing space, particularly in major cities like Riyadh and Jeddah, where over 95% of available warehouse space is already occupied, leading to increased rental costs and limited storage options. Also, regulatory complexities and stringent customs procedures can cause delays in import clearance, affecting inventory levels and leading to stockouts. The reliance on traditional inventory management practices further hampers responsiveness to market demands. While initiatives under Vision 2030 aim to modernize logistics infrastructure and streamline regulations, the current supply chain challenges continue to pose significant hurdles for retailers striving to meet consumer expectations in a rapidly evolving market.

Regulatory Compliance

Regulatory compliance remains a notable challenge for the retail market in Saudi Arabia, particularly amid the country’s rapid economic transformation. Retailers must navigate an evolving legal and regulatory landscape shaped by the government's Vision 2030 reforms. New policies related to Saudization, data protection, consumer rights, and taxation require businesses to regularly update their operations and administrative processes. For example, increased enforcement of local hiring quotas adds complexity to workforce planning, especially for multinational retailers. Also, adapting to new e-commerce regulations, such as requirements for local servers and secure payment systems, can be costly and time-consuming. Import regulations, product labeling standards, and frequent policy updates further complicate compliance, especially for small and medium enterprises. Retailers that fail to keep pace with these regulations risk penalties, reputational damage, and operational disruptions. Thus, maintaining regulatory compliance in a dynamic legal environment is a persistent and resource-intensive challenge for retail businesses in Saudi Arabia.

Key Market Trends

Increased Adoption of Digital Payment

The adoption of digital payments in Saudi Arabia has experienced remarkable growth, significantly transforming the retail landscape. As a part of this, according to a recent study as of 2024, electronic payments accounted for 79% of all retail transactions, up from 70% in 2023, marking a substantial increase in cashless transactions. This surge is attributed to several factors, including the widespread use of smartphones, improved internet connectivity, and the proliferation of fintech applications, which have made digital payments more accessible and convenient for consumers. Government initiatives, such as the Financial Sector Development Program under Vision 2030, have also played a pivotal role by enhancing payment infrastructure and promoting digital financial services. The rise in digital payment adoption has not only streamlined retail transactions but also bolstered the growth of e-commerce, as consumers increasingly prefer the convenience and security of online payments. Looking ahead, the trend toward digital payments is expected to continue, further reshaping Saudi Arabia's retail sector and contributing to the nation's broader economic modernization goals.

E-Commerce Surge

Saudi Arabia’s e-commerce sector is experiencing rapid growth, establishing itself as a regional leader in digital retail. With high internet penetration and widespread smartphone usage, a tech-savvy population is increasingly turning to online shopping for convenience and variety. Government initiatives under Vision 2030 have played a crucial role in promoting digital transformation by improving logistics infrastructure and supporting fintech innovations, which have made online transactions smoother and more secure. The rise of mobile commerce further accelerates this trend, as a significant portion of purchases now occur through mobile apps, catering to on-the-go consumers. Also, the growing preference for contactless payments and home delivery services has boosted e-commerce adoption. This surge is reflected in strong market projections, with the sector expected to continue expanding robustly over the coming years. Overall, the e-commerce boom is reshaping Saudi Arabia’s retail landscape, driving innovation, enhancing consumer choice, and contributing significantly to the country’s economic diversification goals.

Increased Focus on Sustainability

Saudi Arabia's retail sector is increasingly prioritizing sustainability, aligning with national goals under Vision 2030 to reduce carbon emissions and promote environmental stewardship. Retailers are adopting eco-friendly practices such as using sustainable materials in store fit-outs, implementing energy-efficient lighting, and reducing water consumption. For instance, companies are utilizing reclaimed wood, recycled metals, and low-VOC paints to create greener retail environments. Also, energy-saving technologies like LED lighting and water-efficient fixtures are being incorporated to minimize environmental impact. These initiatives not only contribute to environmental conservation but also resonate with the growing consumer demand for sustainable products and practices. As sustainability becomes a key differentiator in the market, retailers are embracing these changes to enhance brand reputation and meet the expectations of environmentally conscious consumers.

Segmental Insights

Distribution Channel Insights

Supermarket/Hypermarket dominated the Saudi Arabia Retail market, driven by their ability to offer wide product assortments under one roof, catering to the convenience and diverse needs of consumers. Their strategic locations in urban and suburban areas make them easily accessible, attracting large foot traffic. Competitive pricing, frequent promotions, and loyalty programs further enhance their appeal. Also, the growing middle-class population with increasing disposable income favors these formats for their reliable quality and variety. The integration of modern technology and e-commerce platforms has allowed supermarkets and hypermarkets to expand their reach through online shopping and home delivery services. Government support for retail infrastructure and investment in supply chain modernization also strengthen their position, making supermarkets and hypermarkets a cornerstone of Saudi Arabia’s retail landscape.

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Regional Insights

Western region dominated the Saudi Arabia Retail market, due to its strategic geographic location, serving as a gateway for both domestic and international trade. Major cities like Jeddah and Mecca attract millions of residents and visitors annually, boosting retail demand significantly. The region benefits from well-developed infrastructure, including modern shopping malls, commercial centers, and efficient transport networks that facilitate smooth logistics and supply chains. Also, the Northern & Central region's is driven by status as administrative and economic hubs. Riyadh, the capital city in the Central region, hosts a large population with high purchasing power and a growing middle class, fueling demand for diverse retail offerings. The regions benefit from extensive infrastructure development, including modern malls, commercial districts, and improved transport links, enhancing accessibility.

Recent Developments

• In February 2025, Saudi Arabia’s Panda Retail Co. plans to open over 20 new stores in 2025, continuing the rapid expansion. This growth aligns with Panda’s commitment to sustainable retail development driven by innovation. It also reflects the robustness of Saudi Arabia’s retail sector, which achieved sales of $9.97 billion in the third quarter of 2024, demonstrating strong performance despite global economic uncertainties.
• In March 2025, Carrefour, has unveiled ambitious expansion plans in Saudi Arabia, including the addition of new hypermarkets and the enhancement of its online platform. Operated in the region by Majid Al Futtaim, Carrefour’s growth strategy aligns closely with Saudi Arabia’s Vision 2030, supporting the country’s economic diversification goals by investing in the modernization of the retail sector.
• In June 2024, Spinneys, a leading premium fresh food retailer, has announced the launch of its inaugural store in Saudi Arabia. The new outlet is situated within La Strada Yard, a dynamic mixed-use development in the affluent An Nuzha district of Riyadh. As an emerging center for both residential and commercial activities, La Strada Yard provides an ideal setting for Spinneys’ first entry into the Kingdom’s market.

Key Market Players  

• Lulu Retail
• Al Othaim Holding's
• Majid Al Futtaim Holding LLC
• Bindawood Holding
• Noon E Commerce Solutions One Person Company LLC
• Amazon
• Alibaba Group Holding Limited
• Jarir Bookstore
• Nibras Al Arabia LLC
• Gulf Marketing Group (GMG)

Report Scope:

In this report, the Saudi Arabia Retail Market has been segmented into the following categories, in addition to the industry trends which have also been detailed below:

•   Saudi Arabia Retail Market, By Type:

o   Food Retail

o   Non-Food Retail

• Saudi Arabia Retail Market, By Retail Store Type:

o   Supermarket/Hypermarket

o   Online

o   Baqala Stores

o   Departmental Stores

o   Exclusive Stores

o   Convenience Stores

o   Others

• Saudi Arabia Retail Market, By Region:

o   Eastern

o   Western

o   Northern & Central

o   Southern

Competitive Landscape

Company Profiles: Detailed analysis of the major companies presents in the Saudi Arabia Retail Market.

Available Customizations:

Saudi Arabia Retail Market report with the given market data, TechSci Research offers customizations according to a company's specific needs. The following customization options are available for the report:

Company Information

• Detailed analysis and profiling of additional market players (up to five).

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