Something doesn’t add up in Saudi grocery. Official figures show food and drink inflation slowed to almost nothing — about 0.2% in early 2026 (SAMA 2026). Yet the big global brands are watching their margins shrink in the main cities. Most blame shipping costs or logistics. That’s not the real reason. The real reason is the pack on the shelf. Brands still sell one standard size to everyone. But the middle-class shopper they designed it for no longer shops in the middle.

Where the money is going

Household budgets in the cities are under real pressure. Rents jumped 4.8% in the main urban centres, and people are cutting their grocery spend to cover it (SAMA 2026). But they’re not cutting evenly. They do two things at once. For everyday staples, they trade down hard to cheap private-label products. For small treats and convenience, they pay a premium for single-serve items delivered to the door. One shopper, two completely different habits. The pack in the middle gets skipped.

The standard pack is the casualty

The biggest loser is the old standard pack — the 400g to 800g size that used to make brands most of their profit. It now fails on both sides. In cheap discounters like Dukan and the new VIVA chain, store-brand versions sit right next to it, priced 30% to 40% lower per gram (Trendtype 2026). On the other side, quick-delivery apps like Ninja and Nana won’t stock the mid-size at all. Their small dark stores don’t have room, and their customers want instant, single-use items. So the standard pack is squeezed from below on price and from above on convenience.

The fix: stop selling one size to everyone

Saudi retail is heading toward a total value of around SAR 436.12 billion (Euromonitor 2025). To hold their share of it, brands have to drop the idea of one national price for one national pack. They need two separate pack-and-price tracks, each built for one type of shopper.

The first track is for the discounters. Here the goal is volume, not margin. Strip out the fancy packaging and marketing extras. Sell large, plain, bulk sizes built for price. You give up margin per unit on purpose — to keep your volume and hold your spot on the shelf against the store brands.

The second track is for the delivery apps. Here you can charge more. People ordering from an app aren’t comparing price per gram. They’re paying for speed and convenience. Shrink the product into single-serve or ready-to-eat formats, and you can add roughly a 40% markup. That premium helps win back the margin you gave away in the discount channel.

The middle aisle has lost its commercial viability.

Splitting your packs in two is harder than it sounds. There are real risks, and three stand out.

First, fresh food doesn’t wait. Bulk packs of dairy or chilled products carry tight expiry dates. Discounters run leaner, cheaper cold storage than premium hypermarkets. If those bulk packs don’t sell fast, they get written off — and the loss can wipe out the volume gains.

Second, cheap stock leaks. If a stripped-down bulk pack meant for a discounter ends up elsewhere, traders will buy it cheap and resell it to neighbourhood bakalas. That undercuts your full-price products sitting in the same area.

Third, the big retailers will push back. Chains like Panda, Lulu and Abdullah Al-Othaim won’t quietly accept losing volume to discounters or margin to delivery apps. If you pull support from their standard shelves, they tend to retaliate — higher listing fees, deeper discounts demanded, or worse shelf position in favour of their own store brands.

So this isn’t about a clever packaging tweak. It’s a balancing act — managing pushback from big retailers while protecting the margin you actually make. As one key account manager in Riyadh put it:

“Standard 500g pasta packs sit unsold on the shelves for weeks. Shoppers want one of two things now. Either a 3kg bulk bag from a discounter to stretch the household budget, or a single-serve microwave cup delivered by an app in 12 minutes. The middle aisle has lost its commercial viability.”

The question for any brand leader in Saudi grocery is simple, even if the answer isn’t. Your best-selling pack for the last decade is now your weakest. Are you willing to break it in two before a private label and a delivery app break it for you?

Sources

Euromonitor. 2025. Retail in Saudi Arabia Expands Steadily as Grocery Formats and Value Channels Drive Growth. London: Euromonitor International.

Saudi Central Bank (SAMA). 2026. Inflation Report Q1 2026: Developments in Domestic Consumer Price Indices. Riyadh: SAMA.

Trendtype. 2026. UAE-based discounter VIVA enters Saudi Arabia with the launch of two stores. Dubai: Trendtype Research.