Boston, MA -- (SBWIRE) -- 06/16/2014 -- We expect the positive momentum in private consumption to continue in the medium term, and forecast private consumption growth of 5.0% in 2014 (adding 1.5 percentage points to headline growth), from an average of 5.7% over 2008-2012. We maintain our medium-term bullish outlook on the retail and trade sector, with sales benefiting from rising disposable incomes, favourable demographics and increasing urbanisation.

Headline Industry Data

- 2014 food consumption growth in local currency = +8.0%; compound annual growth rate (CAGR) 2013 to 2018 = +7.6%
- 2014 confectionery value sales growth in local currency = +6.9%; CAGR to 2018 = +6.5%
- 2014 mass grocery retail sales growth in local currency = +10.3%; CAGR to 2018 = +9.6%

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Key Company Trends

Restrained Inflation Conditions To Continue: We expect inflationary pressure in Saudi Arabia to remain restrained throughout the coming quarters, and have revised down our average consumer price inflation (CPI) forecast for 2014 to 3.4%, from 4.0% previously. Latest data from the Central Department of Statistics show that annual CPI averaged 2.8% in the first quarter of 2014, down from 3.9% in Q113. We retain the view that rental inflation will remain the most important driver of the headline print owing to the country's shortage of affordable housing - a situation that we see improving only slowly in the years ahead.

Coca-Cola And Aujan Plan More Acquisitions: Saudi Arabia-based beverage company Aujan Industries is reportedly willing to sign more acquisitions in partnership with US soft drinks giant The Coca-Cola Company, according to CEO Nicolaas Nusmeier. Indeed, the companies' joint venture (JV) Aujan Coca-Cola Beverages Company is set to acquire Lebanon-based National Beverage Company (NBC). Following the acquisition, the JV will own an 80% stake in NBC, while the remaining 20% stake will be held by Transmed Holding. Though the company has not disclosed the exact amount paid for the...

The Saudi Arabia Food & Drink Report features Business Monitor International (BMI)'s market assessment and independent forecasts for food and drink expenditure, consumption, sales, and imports/exports and forecasts for the mass grocery retail sector. The report also includes analyses of major regulatory developments, the background macroeconomic outlook and competitive landscape comparing national and multinational companies by leading products and services, sales, investments, partners and expansion strategies.

BMI's Saudi Arabia Food & Drink Report provides industry professionals and strategists, sector analysts, business investors, trade associations and regulatory bodies with independent forecasts and competitive intelligence on the food and drink industry and the mass grocery retail market in Saudi Arabia.

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