Saudi consumer spending hits record high as ecommerce and lifestyle retail drive economic transformation

• Saudi consumers spent SAR 1.41 trillion (US$ 376 billion) in 2024 
• Major lifestyle retail developments among 3.4m sqm of new retail space due for completion by 2028 
• Café culture is on the rise with F&B spend accounting for 29% of all point-of-sale transactions    

Riyadh | 10 November 2025: Saudi Arabia’s retail transformation is accelerating, with consumer spending rising 7% to a record high of SAR 1.41 trillion (US$ 376 billion) in 2024 and more than 3.4m sqm of new space due for completion by 2028, according to commercial sector focussed second part of The Saudi Report 2025 published today by global property consultancy Knight Frank. The report highlights a fundamental reshaping of the Kingdom’s retail environment, characterised by experience-led destinations with diverse food & beverage (F&B) and entertainment offerings.  

Riyadh leads the Kingdom’s retail market with 4.17 million sqm of gross leasable area (GLA) as at the end of H1 2025 and it remains at the forefront of new supply. Landmark projects The Avenues Riyadh (due in 2026) and Diriyah Square (due in 2027) will deliver more than 600,000 sqm of a total 2.2 million sqm scheduled for completion by 2028. Across other major cities, quality retail supply totals 8.7 million sqm of GLA. 

Faisal Durrani, Partner – Head of Research, MENA said: “The confluence of ambitious real estate development, an increasingly sophisticated consumer base and the rapid acceleration of digital adoption in the retail sector reflects the success of the Kingdom's economic transformation under Vision 2030. While e-commerce is capturing a growing share of retail sales, physical stores continue to play a vital role in experiential shopping, brand visibility and consumer engagement. Importantly, while the growing luxury segment is driving demand for premium retail and leisure offerings and dining concepts, our data suggests there is perhaps an even greater opportunity in catering for the value-conscious majority in the mid-market segment.” 

At the end of H1 2025, average rents in Riyadh for prime regional and super-regional malls stood at SAR 2,795 psm. Citywide occupancy was 91%, supported by demand in destinations such as the newly opened Solitaire Mall, a luxury hub hosting brands such as Cartier, Tiffany and new entrants A.P.C. and Paul Smith. Jeddah remains broadly aligned with Riyadh on rents and average occupancy is 87%. In the Dammam Metropolitan Area (DMA), occupancy stands at 91%, with super-regional malls' lease rates averaging SAR 2,258 psm.  

In parallel with the growth in physical retail, online shopping has become embedded in Saudi consumer behaviour, with less than 1% (of those interviewed by Knight Frank to understand consumer behaviour trends) yet to buy anything online. The total value of e-commerce and point-of-sale (POS) transactions increased by 5% year-on-year to SAR 374 billion in the first half of 2025 and online shopping alone grew by 42% to SAR 41 billion.  

Analysing the motivation behind online shopping reveals Saudis who earn SAR 80,000+ per month are primarily drawn to e-commerce for access to international brands and categories (78%), while middle-income Saudis (earning SAR 30,000-50,000 per month) prioritise value and convenience, including 24/7 shopping availability (78%) and home delivery options (73%). 

This bifurcation is also reflected in analysis of wider retail spending, which found 71% of consumers remain value-driven, spending between SAR 100 and SAR 400 per visit to a retail destination. At the higher end of the market, 27% of those earning SAR 70,000+ per month spend more than SAR 1,000 per trip.  

Visitation patterns highlight the role of malls and entertainment hubs as part of weekly social and leisure routines. Around 29% of respondents visit a retail destination 1-2 times per week, while 27% go 2-3 times per week. The majority (56%) will drive for 10-20 minutes to reach a retail destination, 3% will commute for less than five minutes, and only 2% are prepared to walk.  

THE IMPORTANCE OF F&B 

Together, retail and F&B represent nearly 45% of all point-of-sale (POS) spending, and the F&B segment remains central to the retail sector’s performance. In Q1 2025, 29% of all POS transactions, worth SAR 99 billion, were linked to restaurant and café spending, according to the Saudi Central Bank. 

Jonathan Pagett, Partner – Head of Retail Advisory, MENA said: “The traditional retail model is rapidly giving way to integrated lifestyle destinations. Saudi Arabia’s youthful population is seeking more than transactional retail; they demand immersive and engaging experiences. This has accelerated the rise of integrated destinations where shopping is complemented by competitive socialising, next-gen entertainment and integrated outdoor dining plazas. F&B acts as the connective tissue, whether through casual cafés that extend dwell time, or premium dining clusters that anchor evening and weekend footfall.” 

Riyadh and Jeddah are at the forefront of F&B-driven lifestyle retail growth, benefiting from high occupancy, strong demand for mixed-use destinations, and a robust development pipeline. Upcoming projects such as The Bellevue in Riyadh and Jeddah Cove Waterfront illustrate how the sector is reshaping the Kingdom’s retail and tourism offering, catering to both domestic and international visitors. 

Riyadh’s lifestyle retail market is the largest in the Kingdom, with 484,900 sqm of GLA across 27 developments and an occupancy rate of 97%, according to Knight Frank’s analysis. Looking ahead, this is set to expand by 386,300 sqm by 2027 through 12 new projects, reflecting a 34% CAGR. The largest development, The Bellevue, will deliver a 90,000 sqm open-air lifestyle centre in the east of the city with shaded plazas, water features and a mix of luxury retail, dining and family leisure. 

Jeddah’s lifestyle retail market currently comprises 233,400 sqm of GLA across 17 developments, with 94,000 sqm added in 2023-2024. Citywide, occupancy stands at 81%, with F&B at 75% and average monthly lease rates of around SAR 2,200 psm. By 2027, an additional 205,600 sqm will be delivered across seven projects, bringing the total supply to 439,000 sqm. The most notable is Jeddah Cove Waterfront, a 70,000 sqm destination on the Corniche, close to the Formula 1 circuit, the Jeddah Season site and the City Walk event space. 

THE RISE OF COFFEE CULTURE 

For Saudi nationals, “coffee culture” has become a defining trend in the Kingdom, with 43% reporting that they go out for coffee several times a week. This is also the most affordable dining occasion, as most respondents spend less than SAR 50 per visit. Dessert outings represent the second most common activity, with the majority of respondents suggesting this is a weekly outing. Family dinners rank as the third most common activity, with 38% of Saudi nationals reporting eating out at least once a week.  

Although global cuisine continues to dominate in Saudi Arabia’s lifestyle retail centres, with Arabic food accounting for only 19% of offerings in Riyadh and 15% in Jeddah, Knight Frank found 60% of consumers cite a preference for Saudi cuisine when dining out. 

Konstantinos Papadakis, Associate Partner – Food and Beverage Consultancy, MENA said: “For decades, Saudi Arabia’s F&B scene was defined by the import of international brands, and the focus was on bringing global names into the local market. Today, however, the narrative is shifting. A new generation of Saudi restaurateurs and chefs is exploring the country’s own culinary identity, reinterpreting traditional flavours through contemporary concepts. Restaurants such as Maiz in Diriyah exemplify this evolution, celebrating Saudi cuisine with the same creativity and sophistication once reserved for international imports.” 

Pagett concluded: “The Saudi retail market is entering an intense and transformative phase of development. The dual engines of rapid digital adoption and massive investment in physical, integrated lifestyle destinations will continue to drive dynamic change. As the market matures and new supply comes online, success will belong to developers and retailers who prioritise seamless omni-channel experiences, localise their F&B offerings, and effectively cater to the distinct needs of the value-driven majority and the expanding luxury segment.  

“The focus is no longer just on selling goods, but on curating environments where shopping, dining, and leisure seamlessly intersect, encouraging longer visits and stronger consumer loyalty.”