As Chalhoub Group stated during the IADS CEO meeting in Dubai earlier in 2023, Saudi Arabia stands out as one of the Middle East’s most dynamic retail markets, undergoing rapid transformation fueled by Vision 2030’s drive to diversify the economy beyond oil[1].

In 2024, the Saudi retail market reached approximately USD 270.8 billion, with forecasts projecting growth to USD 408.7 billion by 2033 at a compound annual growth rate (CAGR) of 4.2%. The retail landscape has shifted from a dominance of traditional souks and small traders to a more organised and modern format, adapted to the needs of an urban, digitally savvy population (83% of Saudis live in urban areas, 98% of Internet traffic is done via smartphones) and making the most of an increasing consumer spending, especially among youth, expected to account for 75% of retail spending by 2035.

E-commerce is a significant growth engine, with online retail reaching an estimated market size of USD 8.7 billion in 2023 and experiencing a 32% CAGR over the past five years. Apparel, beauty, and food and drink are among the leading online categories, with apparel alone generating USD 4.18 billion in online sales. Substantial investments in omnichannel strategies, digital payments, and experiential retail concepts further energise the retail ecosystem.

This robust growth positions Saudi Arabia as a regional retail powerhouse, attracting local and international retailers considering entering, or strengthening their positions, in KSA. Taking the opportunity of conferences in the country, the IADS visited a selection of malls in Riyadh to understand the market and how department stores are faring there. From the most traditional malls (Olaya Mall, Panorama Mall), to the more Dubai-like (Cenomi Nakheel Mall), luxury-oriented (Al Faisaliah, Kingdom Centre, Solitaire), and experiential (Via Riyadh) ones, it is clear that there is room for the unity of space, supply and time that the department store format offers, much more than just for Harvey Nichols Riyadh and Al Rubaiyat.

IADS Exclusive: In Riyadh, department stores are trying to carve their place between souks and supermalls 

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