According to a recent report by Knight Frank, total consumer spending in Saudi Arabia, including cash withdrawals, increased by 7% during 2024 to reach SAR 1.41 trillion, compared to SAR 1.41 trillion in 2024, according to the company. <According to a recent report by the firm, total consumer spending in the Kingdom, including cash withdrawals, increased by 7% in 2024 to reach SR1.41 trillion, compared to SR1.31 trillion in 2023. This growth is supported by e-commerce booming by 26% to reach SR197.4 billion, reflecting a notable shift in consumer behavior towards purchasing via digital platforms.
Riyadh takes the largest share
<Riyadh leads the way in retail expansion, accounting for 2.2 million square meters of the 4.9 million square meters of commercial space planned to be added in Saudi Arabia's largest cities by 2030. Data indicates that total supply in the city reached 4 million square meters by the end of Q1 2025, driven by mega projects such as Solitaire Riyadh, which added 65,000 square meters of high-end retail and entertainment.Riyadh Solitaire Riyadh is expected to add 2.2 million square meters of retail space. Another 540,000 square meters are expected to be added during 2025, taking commercial space to 5.2 million square meters by 2026, an increase of 20% in just two years.
Major projects redrawing the retail map
Riyadh is witnessing the implementation of strategic projects such as Qiddiya, Avenues Riyadh and Jewel Riyadh, which aim to provide shopping and entertainment experiences in line with the objectives of Saudi Vision 2030, especially improving the quality of life and diversifying the economy.
Jonathan <Jonathan Paget, Head of Retail Advisory at Knight Frank, said: “A growing population and rising disposable incomes are accelerating the transformation of Riyadh's retail sector, with developers designing experiential spaces that include entertainment, restaurants and cinemas.”
Jonathan Paget, head of retail advisory at Knight Frank, said.
Demand for luxury goods is growing
Despite the expansion of luxury fashion brands such as Gucci, Hackett London and Steve Madden into the Saudi market, the report noted that local consumers still value promotions and affordable prices, reflecting a desired balance between luxury and value.
In the food sector, demand for luxury goods is growing. In the F&B sector, the data showed that a third of POS transactions in 2024 - about 198.6 billion riyals - were in restaurants and cafes, highlighting the role of this sector as a key driver in the retail experience.
Data showed that a third of POS transactions in 2024 - about 198.6 billion riyals - were in restaurants and cafes, highlighting the role of this sector as a key driver in the retail experience.
Digitalization and installment buying are reshaping the market
Technology has become a key driver in the retail sector, with 40% of point-of-sale transactions now taking place via e-commerce. Buy Now Pay Later (BNPL) is one of the most notable innovations that has gained traction, especially through companies such as Tabby and Tamara, which account for 95% of the market and provide legitimate interest-free financing solutions.
Amar Hussain said that technology has become a key driver in the retail sector, with 40% of POS transactions now taking place via e-commerce. <Ammar Hussein, Associate Research Partner, said: ”The transformation of the retail market is not confined to one age group, but is driven by several segments including tech-savvy youth, value-conscious seniors, and tourists looking for luxury experiences, enhancing diversity and creating demand for omni-channel retail.”
Ammar Hussein, Research Associate Partner, said.
Promising opportunities and accelerating growth
These indicators show that the retail sector in Saudi Arabia, particularly in the capital city of Riyadh, is rapidly moving towards a more modern, diverse and attractive environment for investors. As rents continue to grow and demand increases, Riyadh is emerging as a leading regional destination for integrated shopping experiences that combine entertainment, luxury and value.
Riyadh's retail sector in Saudi Arabia, particularly in the capital, is accelerating towards a more modern, diverse and attractive environment for investors.
