Saudi Mall-Based Retail Market Size, Share, Growth Drivers, Trends, Opportunities & Forecast 2025-2030

Saudi Arabia mall-based retail market valued at USD 20 Bn, driven by urbanization, rising incomes, and retail expansion in Riyadh, Jeddah, Dammam.

The Saudi Arabia Mall-Based Retail Market is valued at USD 20 billion, based on a five-year historical analysis. This growth is primarily driven by increasing consumer spending, urbanization, and the expansion of retail infrastructure. The rise in disposable income and a growing middle class have significantly contributed to the demand for diverse retail offerings within malls.

Key cities such as Riyadh, Jeddah, and Dammam dominate the market due to their large populations and economic activities. Riyadh, as the capital, serves as a central hub for commerce and tourism, while Jeddah's coastal location attracts both local and international visitors, enhancing retail opportunities. Dammam, being an industrial city, supports a robust consumer base.

In 2023, the Saudi government implemented regulations to enhance the retail sector's competitiveness by allowing foreign investments in mall developments. This initiative aims to attract international brands and improve the overall shopping experience, thereby boosting economic growth and job creation in the retail sector.

Saudi Arabia Mall-Based Retail Market Segmentation

By Type:

The market is segmented into various types, including Fashion Retail, Electronics and Appliances, Food and Beverage, Home Goods, Health and Beauty, Entertainment, and Others. Among these, Fashion Retail is the leading sub-segment, driven by the increasing demand for clothing and accessories among consumers. The rise of social media and fashion influencers has also significantly influenced consumer preferences, leading to a surge in fashion-related purchases. Electronics and Appliances follow closely, as technological advancements and consumer electronics trends continue to shape shopping behaviors.

By End-User:

The end-user segmentation includes Families, Young Adults, Tourists, and Corporate Clients. Families represent the largest segment, as malls are often seen as family-friendly destinations offering a variety of shopping and entertainment options. Young Adults are also a significant demographic, driven by trends in fashion and technology. Tourists contribute to the market through their spending on luxury goods and local products, while Corporate Clients often engage in bulk purchases for events and functions.

Saudi Arabia Mall-Based Retail Market Competitive Landscape

The Saudi Arabia Mall-Based Retail Market is characterized by a dynamic mix of regional and international players. Leading participants such as Al-Futtaim Group, Majid Al Futtaim, Al Habtoor Group, Al Othaim Holding, Fawaz Alhokair Group, Panda Retail Company, Jarir Marketing Company, Extra Stores, Landmark Group, Al-Muhaidib Group, Al-Mansour Group, Al-Jazira Group, Al-Muhaidib Group, Al-Rajhi Group, Al-Suwaidi Group contribute to innovation, geographic expansion, and service delivery in this space.

Saudi Arabia Mall-Based Retail Market Industry Analysis

Growth Drivers

Increasing Urbanization:

Saudi Arabia's urban population is projected to reach 36 million in the future, up from 34 million in the past, indicating a significant shift towards urban living. This urbanization trend drives demand for mall-based retail, as consumers seek convenient shopping experiences. The government’s Vision 2030 initiative aims to enhance urban infrastructure, further supporting retail growth. Enhanced public transport and urban planning will facilitate access to malls, making them central to the shopping experience in urban areas.

Rising Disposable Incomes:

The average disposable income in Saudi Arabia is expected to increase to SAR 80,000 (approximately USD 21,300) per capita in the future, up from SAR 75,000 in the past. This rise in disposable income allows consumers to spend more on retail goods, particularly in malls that offer diverse shopping options. As consumer purchasing power grows, mall-based retailers can expect increased foot traffic and higher sales volumes, contributing to a robust retail environment.

Expansion of Retail Formats:

The number of shopping malls in Saudi Arabia is projected to grow from 100 in the past to over 120 in the future, reflecting a 20% increase. This expansion includes the development of mixed-use spaces that combine retail, entertainment, and dining. Such formats attract a broader audience, enhancing the shopping experience and driving foot traffic. The diversification of retail formats caters to changing consumer preferences, making malls more appealing destinations for families and young adults alike.

Market Challenges

Intense Competition:

The Saudi retail market is characterized by fierce competition, with over 50% of retail sales occurring in malls. Major players like Al-Futtaim and Majid Al Futtaim dominate the landscape, making it challenging for new entrants. This competition pressures pricing strategies and marketing efforts, as retailers must differentiate themselves to attract consumers. The saturation of the market may lead to reduced profit margins, compelling retailers to innovate continuously to maintain market share.

Economic Fluctuations:

Saudi Arabia's economy is heavily reliant on oil, which can lead to volatility in retail spending. The GDP growth rate is projected to be 2.5% in the future, down from 3.2% in the past, indicating potential economic slowdowns. Such fluctuations can impact consumer confidence and spending habits, leading to decreased foot traffic in malls. Retailers must adapt to these economic conditions by implementing flexible strategies to mitigate risks associated with economic downturns.

Saudi Arabia Mall-Based Retail Market Future Outlook

The Saudi Arabia mall-based retail market is poised for transformation, driven by technological advancements and evolving consumer preferences. As e-commerce continues to integrate with physical retail, malls will increasingly adopt omnichannel strategies to enhance customer experiences. Additionally, the focus on sustainability will shape retail practices, with more brands prioritizing eco-friendly products. The growth of experiential retail will also redefine shopping, as consumers seek unique experiences beyond traditional shopping, positioning malls as lifestyle destinations rather than mere shopping venues.

Market Opportunities

Growth of E-commerce Integration:

The integration of e-commerce within mall environments presents a significant opportunity. With online retail sales projected to reach SAR 30 billion (approximately USD 8 billion) in the future, malls can leverage this trend by offering click-and-collect services. This hybrid model enhances customer convenience and drives foot traffic, allowing retailers to capitalize on both online and offline shopping behaviors.

Development of Mixed-Use Spaces:

The trend towards mixed-use developments offers substantial opportunities for mall-based retailers. In the future, it is estimated that 40% of new retail spaces will be part of mixed-use complexes, combining shopping, dining, and entertainment. This approach attracts diverse consumer demographics, fostering a vibrant community atmosphere that encourages longer visits and increased spending within malls.