TASTE OF SUCCESS

Saudi Arabia 2020 | AGRICULTURE | INTERVIEW

With competition in the F&B sector at an all-time high, Raydan Restaurants is focusing on increasing efficiencies and enhancing its bottom line to stay ahead.

Fozan Al Harthy
BIOGRAPHY
Fozan Al Harthy has been the CEO of Raydan since 2014. He was previously the human resource and administration director at Sawani Group in Saudi Arabia. He holds a PhD in philosophy business administration and public administration from the American University.

How was your performance in 2018 in terms of profits and revenue?

Revenues and our share of the market remained the same from 2017 to 2018; however, 2018 was extremely competitive, and many new companies entered the market, so we largely consider the year a success. Profit was affected by new expenses such as increased utility and regulatory costs, which meant the bottom line fell from 15% to 18%, although sales did not decline. We also included the calorie counts of all of our products, which was expensive, though it allows us to categorize our products. There was an extra cost of SAR8 million (USD2.13 million) for our manpower compared to three years ago, and this will affect our bottom line as well. Costs continue to rise for everyone in our sector. We employ 1,300 people, and most are expatriates. We are 22-23% Saudi.

What is the current state of the food sector in Saudi?

The food market is booming, and there are many start-up businesses. There are firms supporting start-up businesses to build the brand, and every day there is competition with a new brand that will take some market share. The boom is affecting the sector. Perhaps after five years, the market will be stable, though today everyone believes F&B is a great sector to invest in, and this affects the sector itself. This phase is like a test for businesses, and many will fail. Many companies are looking at acquisitions, so there are many opportunities in the market.

You have expanded your franchising model. What is the future of that process?

We are working hard, and perhaps by the end of 2019 we will have a franchise in three or four cities in Saudi Arabia. This will not add costs, so it will be easy to grow and maintain our market share. We intend to enter smaller cities and the main countries around the Middle East. We have started in the UAE and will open a franchise in Dubai in March.

How do you use technology to reduce your costs?

We are working on a plan for new central kitchens that allow us to minimize the space required for running the operations. This also saves on the bottom line as we build new branches and help us standardize the taste and quality and make processes efficient in rush times and low times. We cannot change the government regulations, so we have to work to enhance our bottom line. We are finished with construction and will begin operations in 2020, as it is not a small project.

How many locations does Raydan currently own?

We have 24 branches and plan to open eight more in 2019. We have two branches in Egypt and one in Dubai, and by the end of 2019 we will reach more than 30 branches.

Have you seen a change in the number of orders made through applications?

Yes, though this change is based on the support we give to this area. More than 18% of our sales come from our application, while 82% comes from dine-in customers to the restaurants or orders via phone. The costs of certain third-party applications are high, and we stopped some of them after prices increased this year. We decided to concentrate on our own application and the cheaper applications available. Currently, we need to cut costs everywhere to survive and maintain the same KPIs for the company.

What are your expectations for Raydan in 2019?

We will open eight branches in 2019 and increase our manpower by 10%. Our total space will also increase by 15%, and we will cover another two or three new cities to support our business with new markets.