The Saudi retail sector is entering 2025 with strong momentum. Recent data shows that the market was valued at USD 282.2 billion in 2024 and is projected to reach USD 402.7 billion by 2033, growing at a CAGR of 4.03%. Wholesale and retail trade, including restaurants and hotels, expanded by 8.4% year-on-year in Q1 2025, the highest growth among sectors. This performance positions retail as one of the pillars of the economy.
Saudi Arabia also achieved the highest retail index score in the MENA region, driven by population, GDP, and retail sales. Consumer spending rose by 7% in 2024, hitting SAR 1.41 trillion, backed by rising confidence and steady income growth.
Drivers of Growth and Digital Transformation
Vision 2030 plays a central role in reshaping the market. The government has committed USD 3.2 trillion in investments, diversifying the economy and creating fertile ground for retail expansion. Projects like NEOM and Riyadh Boulevard are transforming urban landscapes into retail hubs, boosting demand for food, fashion, and entertainment outlets.
E-commerce is one of the standout stories. By 2030, it is expected to account for 46% of total retail sales, powered by digital adoption, a youthful population, and the government’s push for 70% cashless payments by 2025. Growth rates for e-commerce exceed 60% annually, supported by digital wallets and embedded finance solutions.
Demographics also matter. With over 60% of Saudis under 35, consumer behavior is shaped by tech-savvy, trend-conscious shoppers. From 2022 to 2028, average consumer expenditure is forecasted to grow by 6.4% annually, creating new opportunities for both traditional and digital retailers.
Opportunities Across Retail Sectors
Food and grocery remain the largest category, but fashion and electronics stand out. The fashion market is expected to be worth USD 60 billion in 2025, supported by youth-driven trends and the rise of online platforms. Electronics is robust, fueled by demand for smartphones, appliances, and consumer tech.
Sportswear is another fast-growing segment, rising from USD 1.9 billion in 2024 to USD 2.9 billion by 2033, with activewear climbing at a CAGR of 5.05%. These figures highlight how lifestyle and wellness shifts are shaping retail demand.
The retail real estate market, valued at USD 101.62 billion by 2029 with an 8% CAGR, signals strong expansion of malls, high streets, and mixed-use developments. This is further supported by tourism, which added USD 118.45 billion to GDP in 2023, driving sales in food, fashion, and leisure retail.
Investment Landscape and Future Outlook
Saudi Arabia permits 100% foreign ownership in most retail categories. This makes the country highly attractive for international brands seeking expansion. Luxury concepts, technology-enabled retail, and tourism-driven projects are especially promising. Mega malls and experiential spaces are also reshaping how consumers engage with shopping.
However, challenges remain. These include regulatory hurdles, supply chain issues, and growing competition from established global players. Regional differences in development also create an uneven playing field. To succeed, retailers must embrace omnichannel strategies, focus on personalization, and integrate sustainability into operations.
The future outlook is bright. Urbanization, tourism, and technology will continue to expand opportunities, while Vision 2030 reforms strengthen long-term stability. For investors, the message is clear: Saudi retail is not only growing but transforming—making 2025 a pivotal year to act.
