Feeding the Gulf: What an F&B Feasibility Study Must Get Right in 2026

Food and beverage draws more speculative capital in the Gulf than almost any other consumer sector. It also produces a steady volume of quiet failures, and those failures rarely trace back to weak demand. They trace back to feasibility work that was confident about the wrong things.

This paper takes four assumptions that appear in most F&B investment cases we see and tests each against evidence that can be checked: audited disclosures from the two listed delivery platforms operating in the region, official Saudi tourism and national accounts data, and the published Saudisation timetable.

1. The market-size number is the weakest part of most business cases

Begin with the figure that usually opens the deck.

Mordor Intelligence states that the Saudi foodservice market was USD 30.12 billion in 2025, growing to USD 48.06 billion by 2031 at 8.11% compound annual growth. Fortune Business Insights states that the same market was USD 38.81 billion in 2025.

Both figures were published for the same market and the same year. They differ by 29%, or roughly USD 8.7 billion.

Neither firm is careless. The gap almost always comes from scope: whether the definition includes catering and institutional food service, whether it counts grocery-adjacent prepared food, whether it measures consumer spend or operator revenue, and whether it uses calendar or fiscal periods. Those are legitimate methodological choices. The problem is that a feasibility model quoting one headline number inherits all of those choices without examining any of them.

A second caution follows from reading the summaries closely. The Fortune Business Insights page states that the market will “grow to from USD 38.81 billion in 2025 to USD 30.63 billion by 2032, exhibhiting a CAGR of 7.67%”. A positive compound growth rate cannot produce a smaller terminal value. Whether that is a typographical error or a data handling fault, it is a reminder that headline figures are frequently reproduced without anyone checking that they are internally coherent.

What to do instead. Size the addressable market from the bottom up: population and visitor counts in the specific catchment, realistic covers or transactions per day, achievable average ticket, and observed seasonality. Use published market totals as a sanity check on the result, never as the anchor for it. If a third-party number is load-bearing in the model, obtain the methodology note before the investment committee meets, not after.

2. Demand is real, and unlike market sizing it can be sourced officially

Scepticism about market-size reports should not be mistaken for scepticism about the market.

Saudi Arabia recorded 123 million visitors in 2025 with tourism spending of SAR 304 billion, roughly USD 81.1 billion, according to the Ministry of Tourism annual statistical report. Visitor numbers rose about 6% year on year and spending about 7%. International arrivals accounted for 29.3 million of that total and SAR 176.6 billion of the spend, with domestic tourism contributing 93.3 million trips and SAR 127.1 billion.

One structural detail matters more than the headline for F&B. Non-religious travel accounted for 52% of inbound overnight visits in 2025, up from 44% in 2019, and became the largest single purpose of travel for the first time. Religious visitors and leisure visitors have materially different dining patterns, price sensitivity, dwell time, and geographic concentration. A concept underwritten on pilgrimage volumes is exposed to a different demand curve from one underwritten on leisure.

On the national accounts side, wholesale and retail trade, restaurants and hotels contributed 12.3% of Saudi GDP, and grew 5.4% year on year in the fourth quarter of 2025.

These figures come from government sources, are published on a fixed schedule, and can be tracked over time. That makes them a more defensible foundation for a demand model than any single commissioned estimate.

3. Delivery has stopped being a growth story and become a cost line

The most common error in current F&B feasibility work is treating third-party delivery as incremental demand at low marginal cost. The listed platforms’ own disclosures no longer support that view.

Talabat, listed in Dubai and operating across the UAE, Kuwait, Qatar, Bahrain, Oman, and non-GCC markets, grew group gross merchandise value 28% to USD 9.5 billion in 2025 and revenue 33% to USD 3.9 billion, both at constant currency. Group adjusted EBITDA reached USD 615 million, or 6.5% of GMV, and net income USD 464 million.

The composition of that growth is the important part. In the fourth quarter, GCC gross merchandise value reached USD 2.0 billion and grew 15%, while non-GCC GMV grew 57% to USD 501 million. The GCC share of the business fell from 84% to 80% in a single year. Group adjusted EBITDA margin fell from 6.8% of GMV to 6.3%.

Guidance makes the trajectory explicit. Talabat has guided to 11% to 14% GMV growth for 2026, against 28% delivered in 2025. The company has also earmarked more than USD 100 million of investment for 2026 to scale its grocery vertical and its subscription programme, which is capital deployed to defend and diversify rather than to ride a growing market.

A note on precision, because it changes the read: Talabat’s GCC segment does not include Saudi Arabia. Anyone using these figures as a proxy for Saudi delivery is using data from five other markets.

4. Saudi delivery economics are harder still, and the numbers are public

The Saudi picture comes from Jahez, listed on Tadawul.

In 2025 Jahez grew gross merchandise value 10.8% to SAR 7.2 billion, on a 5.3% increase in order count and a 5.2% increase in average order value. Revenue rose 4.7% to SAR 2,323.6 million.

Profitability moved the other way, and sharply. Operating profit fell 70.7% to SAR 49.4 million. Net profit fell 61.1% to SAR 73 million. Operating expenses rose 26.1% to SAR 469.1 million, driven by marketing spend to defend market share. The fourth quarter produced a loss of SAR 48.5 million.

Read the two platforms together and a consistent picture emerges. Volume in Gulf food delivery still grows. Margin does not follow it. The platforms are spending heavily to hold position in a maturing market, and the economics of that contest are visible in audited accounts rather than inferred.

For an operator, the implication is direct. Delivery orders arrive with a commission, a packaging cost, a discount funded at least partly by the restaurant, and a customer relationship owned by the platform. A feasibility model that treats delivery as pure upside has mispriced the channel. The defensible approach is to model delivery as a distinct channel with its own contribution margin, and to test whether the concept remains viable if delivery is a third of covers at half the contribution.

5. Labour cost is not an assumption, it is a published schedule

Most F&B models treat staffing cost as an operating assumption that management can flex. In Saudi Arabia it is increasingly a legal parameter with dates attached.

Ministerial Resolution 137440, issued on 21 April 2025 by the Ministry of Human Resources and Social Development with the Ministry of Tourism, phases localisation requirements across businesses licensed by the Ministry of Tourism:

• From 22 April 2026, 100% Saudisation of front-desk roles, 70% of specified strategic roles, and 50% of operational roles including restaurant host.
• From 1 March 2027, 30% Saudisation of chef positions.
• From 1 January 2028, 50% Saudisation of senior roles including restaurant manager and food and beverage manager.

The resolution also makes clear that outsourcing does not remove the obligation.

This is unusually good news for modelling, because a legislated schedule is knowable. A five-year projection built on today’s staffing mix and today’s wage assumptions is not conservative. It is wrong on a known date. The chef requirement in particular deserves attention, because culinary talent is the scarcest category to localise and the one where a compliance shortfall most directly threatens the product.

What a defensible F&B feasibility study contains

Bringing the evidence together, five tests separate a feasibility study that survives contact with the market from one that does not.

Build demand bottom up and reconcile to official data. Catchment, transactions, ticket, seasonality. Reconcile the result against tourism and national accounts figures that are published and repeatable, rather than against a commissioned market total.

Model each channel separately. Dine-in, takeaway, delivery, and catering carry different contribution margins. A blended margin conceals the channel that will actually determine the outcome.

Stress the delivery mix, not just the delivery volume. Test the concept at a delivery share materially higher than planned, at the contribution margin delivery actually earns after commission and promotional funding.

Put the Saudisation timetable in the model with its dates. Wage inflation and localisation ratios belong in the projection as scheduled step changes, not as a single blended annual escalation.

Name the number that would change the decision. Every feasibility study should state which single assumption, if wrong by 20%, breaks the investment case. In Gulf F&B it is usually not the market size. It is the rent, the delivery mix, or the fully loaded labour cost at year three.

The reading we would offer a board

The Gulf food and beverage opportunity is real, and the demand data supporting it comes from government sources that can be checked and tracked. What has changed is that the easy version of the story has expired. Delivery is no longer a growth subsidy, the labour cost curve is legislated and rising, and the market-size figures most decks open with disagree with one another by a margin wide enough to invalidate the conclusion drawn from them.

None of that argues against investing. It argues for underwriting the specific site, the specific channel mix, and the specific cost schedule, rather than the sector.

The Advisory Chamber advises operators, franchise groups, and investors on market entry and feasibility across the GCC. To discuss a concept or a specific site in confidence, contact the Chamber.