09/07/2018 08:11 AST

Consumer goods companies in Saudi Arabia have been hit by the introduction of value added tax, higher energy costs and a fragile labor market. At the same time, changing patterns of consumption and inflationary pressures are rapidly reshaping product ranges.

“The GCC market environment remained challenging this quarter with overall negative consumer trends continuing from 2017,” Almarai said in a statement on Sunday.

“Macroeconomic challenges include structural economic changes driving higher costs in energy and transportation, changes in the retail landscape leading to the closure of more than 3,000 shops, the introduction of VAT, the introduction of the expatriate levy, lower export sales combined with a general slowdown in the GCC markets.”

The slowdown has “particularly impacted” the company’s discretionary categories, the company said. Still, Almarai is investing heavily in expanding production with an SR14.5 billion capital program running from last year through 2021, according to the company website.

The plan envisages creating 4,500 jobs for Saudi nationals — some 20 percent of them for women. Regional food groups such as Almarai are boosting production capacity to keep pace with the Middle East’s burgeoning population.

The GCC states have a combined population of about 52 million while the broader Middle East and North Africa (MENA) represents a market of 437 million consumers.

Food accounts for about 21 percent of consumer expenditure in Saudi Arabia valued at some SR185 billion. Packaged food represents about 53 percent of that, according to Almarai.

The company is adapting its business model to cater to changing social trends in Saudi Arabia and elsewhere in the region. Research released last year from Nielsen Retail highlighted a number of significant changes to shopper behavior in Saudi Arabia, such as consumers cutting down on essentials and making purchases when products were on promotion.

Research also showed that households were cooking less frequently with a move towards both healthier eating and food on the go. Almarai said the ready-to-eat trend is being driven by increased participation of women in the workplace.

It is responding to the trends by adding more pre-packaged meal options to its food range.

Arab News

Almarai Company Announces Its Full Compliance in Importing 100% of its Alfalfa and Green Forage Requirements


In accordance with the terms of the Ministerial Council Resolution (66) dated 25 Safer 1440H corresponding to 7th December 2015 to stop completely the local production of green forage for areas above


Saudi Almarai's Q3 gross profit down 4.2pc to $386m


Saudi Arabia's Almarai, the largest dairy company in the Gulf, has reported a gross profit of SR1.45 billion ( $386.3 million) for the third quarter, down 4.2 per cent compared to SR1.5 billion ($39

Trade Arabia

Almarai profit under pressure as Saudi costs rise


Rising labour and tax costs in Saudi Arabia are putting pressure on profitability at Almarai Co, the country’s largest dairy producer. “We will be under pressure, there’s no question,” chief financia

Gulf Times

Ticker Price Volume
SABIC 119.00 3,097,278
QNBK 196.19 65,305
STC 80.90 227,141
DSI 0.37 0
SAICO 11.48 1,245,614
SFICO 25.50 1,002,202
BURUJ 24.50 139,049
ALMARAI Sector Market
Dividend Yield (%)
Relative Strength
  • 1-Month
  • 3-Month
  • 1-Year
Volume Change
  • 10D Avg Vs 90D Avg
Price Vs…
  • 52-w high
  • 50-day moving avg.
  • 200-Day Moving Avg
Ticker Price Change
SAVOLA 27.05 -0.70 (-2.53%)
SADAFCO 96.00 -0.20 (-0.21%)
NADEC 28.00 -0.70 (-2.44%)
HB 45.00 -0.10 (-0.23%)
GIZACO 14.00 -0.30 (-2.10%)
Emaar and Noor Bank offer fast-track home finance


Emaar Development, the global developer, has partnered with Noor Bank, a leading Shari’a-compliant bank in the UAE, to offer an exclusive, fast-track home financing programme for UAE residents and in

The Gulf Today

Dana Gas nine months net profit falls


Dana Gas said on Wednesday its nine months net profit fell to Dh149 million from Dh458 million in the same period last year. However, revenues in the same period rose 6 per cent at Dh351 million. Th

Gulf News

Acquisition and stake sale drive Tabreed’s net profit


Gains from the acquisition of another district cooling entity helped Tabreed record a 10 per cent net profit growth to Dh319.3 million for the period from January to end of September.


Gulf News

Adnoc to invest Dhs5.1b in Bu Hasa field


The Abu Dhabi National Oil Company (Adnoc) on Wednesday announced an Dhs5.1 billion ($1.4 billion) investment to upgrade and expand its Bu Hasa field that will increase crude oil production capacity

The Gulf Today

Gulf Capital sells 74pc stake of PET subsidiary


Gulf Capital, one of the largest and most active alternative asset managers in the Middle East, said that its portfolio company, Middle East Glass (MEG), successfully sold a 74 per cent stake in its

Trade Arabia