Saudi Arabia’s retail sector maintained strong momentum in the first half, driven by rapid growth in e-commerce and rising demand for food and beverage-led retail destinations, according to Knight Frank’s Saudi Arabia Retail Market Overview – Summer 2026.
The report found total consumer spending across point-of-sale transactions, cash withdrawals and e-commerce purchases increased 6.8 per cent year over year to $113.3 billion in the first quarter.
E-commerce remained the fastest-growing channel, with spending surging 42 per cent to $26.2 billion, while point-of-sale spending rose 4.4 per cent to $50.6 billion.
Knight Frank attributed the sector’s resilience to sustained household spending, low inflation and continued expansion of the kingdom’s non-oil economy.
Discretionary categories recorded the strongest growth, with point-of-sale spending rising 47 per cent for jewellery, 25.9 per cent for clothing and accessories, and 23 per cent for telecommunications.
Jonathan Pagett, partner and head of retail advisory, MENA, at Knight Frank, said food and beverage operators play an important role in retail developments, with restaurants, cafés, entertainment and wellness concepts becoming key drivers of foot traffic.
“Ultimately, the most successful projects will be those that differentiate themselves through placemaking, destination quality and customer experience, rather than competing on rental levels alone,” he said.
Lifestyle retail also continued to expand, with Riyadh now home to approximately 485,000sqm of lifestyle retail space across 28 developments.
The centres have an average occupancy rate of 96 per cent, with food and beverage operators accounting for about 76 per cent of tenants.
Associate partner for research, MENA, Amar Hussain, said Saudi Arabia’s retail market continues to evolve as developers and retailers respond to changing consumer preferences.
“While new supply will increase competition across the Kingdom’s major cities, demand remains strongest for well-positioned schemes that combine retail, food and beverage, leisure and entertainment,” he concluded.
