Delivery commissions on local restaurants deemed highest globally: Mukatafa

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Prince Waleed bin Nasser Al Saud, Chairman of Mukatafa Foundation, said the share of local restaurant sales via delivery has surged from 20% to around 60% over the past four years, noting that delivery services have become a fundamental consumer demand.

Speaking to Al-Ekhbariya TV, the top executive explained that the commission rates imposed by delivery platforms on local restaurants are among the highest worldwide, which has taken a toll on the restaurant and café sector.

While large sector players have the leverage to negotiate with delivery platforms, smaller businesses struggle and are often forced to accept the terms imposed by major delivery companies, which represents a major challenge for such businesses.

The decline in retail and F&B sales was due to consumers cutting back their monthly discretionary spending, despite overall growth in public spending. There has been significant growth in spending geared toward the housing sector. The priority given to mortgages and housing expenses has naturally reduced disposable income for consumption.

He further stated that rapid growth in retail and F&B segments has led to a massive oversupply relative to demand, negatively impacting individual business sales.

Moreover, the rising costs of labor, raw material prices, rents, instant fines, and intense competition have eroded profit margins, with one-third of new investors exiting the sector over the past four years. This percentage is expected to increase during 2026-2027, said Prince Waleed.