JEDDAH, 17 January 2003 — There are clear signs that there is a price war under way between international fast food companies who have a presence here in the Kingdom.
Bashar Shaker, a fast food investor, told Okaz newspaper that the market is now growing by 15 percent annually after a drop in sales of between 15 and 40 percent in the immediate aftermath of Sept. 11. A campaign to boycott US products to protest Washington’s support for Israel also had taken a heavy toll on the businesses.
Burger King, McDonald’s and other fast-food chains have a total of more than 300 outlets across the Kingdom, concentrated mainly in Riyadh, Jeddah and Dammam. “There are 20 Saudi and foreign-owned fast food companies here whose total investments are SR3 billion,” he said.
Shaker predicted that a number of fast food companies will withdraw from the market over the next year because of the price war. With lower prices, they are unlikely to meet their profit margins.
Companies, he argued, should improve their services and come up with more original products as a way of attracting customers, instead of just lowering prices.
Heavy advertising on satellite channels has pushed growth in this sector, and statistics reveal that more than 60 percent of viewers actively respond to fast food ads. Women are the main decision makers when it comes to family outings to fast food restaurants.
