Saudi Arabia Retail Market: Digital Commerce Growth, AI-Driven Insights & Personalized Shopping

According to IMARC Group's latest research publication, Saudi Arabia retail market size reached USD 293.6 Billion in 2025. The market is projected to reach USD 411.7 Billion by 2034, exhibiting a growth rate (CAGR) of 3.83% during 2026-2034.

How AI is Reshaping the Future of Saudi Arabia Retail Market

• Personalized Customer Analytics and Engagement: AI-powered analytics and chatbots now deliver real-time personalized recommendations in Riyadh stores, boosting customer retention by 25%. Arabic-language virtual assistants powered by natural language processing are transforming customer service interactions across the Kingdom.
• Automated Checkout and Computer Vision: Smart retail malls have deployed AI-driven automated checkout systems with facial recognition and QR payments. Computer vision technology enables real-time inventory tracking, footfall management, and theft prevention, with the AI smart retail market valued at USD 530 million.
• Predictive Demand Forecasting and Inventory Optimization: Machine learning algorithms analyze purchasing patterns, seasonal trends like Ramadan and Black Friday, and market demands. Retailers optimize inventory management, reduce waste by predicting demand, and ensure popular products remain stocked during high-demand periods.

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How Vision 2030 is Revolutionizing Saudi Arabia Retail Industry

Vision 2030 is fundamentally transforming Saudi Arabia's retail sector through economic diversification and large-scale infrastructure development. Mega-projects like NEOM, Qiddiya entertainment city (opened in 2025), and Riyadh Boulevard are creating new retail destinations, with 2.2 million square meters of retail space planned for Riyadh alone. Tourism has surged dramatically—the Kingdom recorded 100 million tourist visits in 2023, with international visitor spending jumping 57% to SAR 227.4 Billion and domestic spending rising 21.5% to SAR 142.5 Billion. This tourism explosion directly fuels retail demand across food, fashion, luxury goods, and entertainment. The Financial Sector Development Program has accelerated digital payments to 79% of all retail transactions, up from 70%. Major developments like Riyadh Season and Expo 2030 preparations are attracting massive footfall, with mall occupancy rates hitting 92% in Q1 2025, positioning Saudi Arabia as a leading regional retail destination.

Saudi Arabia Retail Market Trends & Drivers:

The Saudi Arabia retail market is experiencing rapid transformation driven by a young, digitally native population and rising disposable incomes. Over 60% of the population is under 35, contributing to strong consumer expenditure growth. Urban centers are expanding rapidly, creating demand for modern retail formats—as of January 2025, approximately 4,549 shopping malls operate across the Kingdom. E-commerce is projected to contribute 46% of the market by 2030, with online spending via mada cards surging 79% year-on-year to SAR 29.86 billion in July. Digital payment adoption has reached 79% of all retail transactions, supported by 98% internet penetration and one of the world's highest smartphone adoption rates. Government initiatives are improving infrastructure, encouraging foreign investment (including 100% foreign ownership in key sectors), and driving economic diversification. Mega-projects such as NEOM, Riyadh Boulevard, and entertainment zones are creating new retail hubs, while relaxed visa policies have increased tourist footfall in malls and outlets.

Consumers are increasingly demanding personalized, experiential shopping that goes beyond transactions. Retailers are creating immersive environments through creative store designs, interactive displays, and engagement events. Technologies like virtual reality showrooms and augmented reality try-on features are becoming mainstream in online shopping. Demand for niche offerings is rising—modest fashion, halal food options, and premium products are gaining traction. In March 2025, Tanmiah Food Company signed an MoU with Griffith Foods to build Saudi Arabia's first 100% halal ingredients facility. The shift toward health-conscious, sustainable, and locally-sourced products is redefining retail strategies. The influx of expatriates and tourists, supported by relaxed visa policies, has increased demand for luxury goods and international retail chains. In 2023, the tourism sector contributed SAR 444.3 Billion to GDP and supports 2.5 million jobs, with events like Riyadh Season, heritage festivals, and beachfront resorts driving sustained retail traffic.

The development of Saudi Arabia's logistics infrastructure is significantly boosting the retail market. Investments in state-of-the-art distribution centers and advanced last-mile delivery solutions ensure faster, more reliable deliveries—the logistics market reached USD 52.7 Billion in 2024 and is projected to grow at 4.9% annually through 2033. Omnichannel retailing is rapidly gaining traction, driven by demand for seamless transitions between online platforms, physical stores, and mobile applications. Retailers are investing in integrated systems offering click-and-collect services, same-day delivery, and loyalty programs. The "retailtainment" trend is reshaping malls into comprehensive social and entertainment hubs, with significant space allocated to entertainment zones, dining experiences, and community events, encouraging longer dwell times and higher footfall. Social media platforms and influencer marketing play a significant role in shaping consumer preferences, particularly among the young, tech-savvy population, with 35.33 million social media users discovering and purchasing products through social commerce channels.

Saudi Arabia Retail Market Industry Segmentation:

The report has segmented the market into the following categories:

Type Insights:

• Food and Beverages
• Personal and Household Care
• Apparel, Footwear and Accessories
• Furniture, Toys and Hobby
• Electronic and Household Appliances
• Others

Product Insights:

• Supermarkets and Hypermarkets
• Convenience Stores
• Specialty Stores
• Online Stores
• Others

Regional Insights:

• Northern and Central Region
• Western Region
• Eastern Region
• Southern Region

Competitive Landscape:

The competitive landscape of the industry has also been examined along with the profiles of the key players.

Recent News and Developments in Saudi Arabia Retail Market

• January 2026: Saudization policy mandates 60% local hires in retail marketing and sales roles, with a SAR 5,500 minimum wage, driving workforce empowerment and operational shifts across Saudi stores.
• June 2025: Riyadh retail expands rapidly amid SAR 1.41 trillion consumer spending, supported by 2.2 million sqm new space and BNPL services like Tamara holding 95% market share.
• March 2025: The Public Investment Fund (PIF) of Saudi Arabia launched Al Waha Duty-Free Company, the Kingdom's first Saudi-owned customs-free business. The company aims to become a travel retail leader, redirecting travel spending toward the Saudi economy while planning luxury retail establishments across the Kingdom featuring premium Saudi merchandise.
• March 2025: Tanmiah Food Company signed an MoU with Griffith Foods to expand halal product offerings, aiming to build Saudi Arabia's first 100% halal ingredients facility, reflecting growing demand for authentic and locally-produced food options.
• February 2025: Aster Pharmacy, the retail division of Aster DM Healthcare, opened for business in Saudi Arabia, launching 15 locations throughout Riyadh, including its flagship outlet at Trio Plaza, expanding healthcare retail options across the capital.

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