International Riyadh Market: Financial and Sector Analysis in Saudi Arabia

The name International Riyadh Market derives from the commercial heritage of the Saudi capital, traditionally referring to one of the most famous markets and shopping complexes in the heart of Riyadh. Historically, this market has been a shopping and trading destination for visitors and residents, characterized by its diverse shops and strategic location. Currently, the name is sometimes used to denote a modern business project or a virtual company seeking to leverage the 'Riyadh' brand. In this report, we study the International Riyadh Market as if it were a virtual public company listed on the Saudi stock market (Tadawul), operating in the retail and commercial services sector, and holding a prestigious position among markets and malls in the Kingdom.

In reality, there is currently no officially listed company by this name among the Tadawul listings. However, analytically, it can be envisioned as an investment entity bearing the characteristics of major retail companies that manage chains of stores and malls serving a broad customer base. This approach aids in understanding the operational mechanisms, financial indicators, and factors affecting the performance of similar companies within the sector. Therefore, we will rely on a virtual model inspired by data from the Saudi commercial sector for the period 2024-2025, while consistently emphasizing the importance of verifying official sources for any financial data.

If the International Riyadh Market were to exist as a public joint-stock company, it would be expected to follow an organizational and administrative structure similar to that of major Saudi retail companies. The board of directors would consist of members with experience in trade, investment, and managing commercial centers. The executive management would include specialized teams in operations, marketing, contract management, logistics, and human resources.

The administrative structure typically focuses on achieving harmony between business strategy and geographical expansion, managing supplier and customer relationships, and ensuring compliance with the regulations of the Saudi Capital Market Authority. The finance department oversees the preparation of quarterly and annual reports, communication with investors, and accurate disclosure of financial performance through the Tadawul platform. Technology plays an increasing role in management, with the introduction of digital transformation solutions and supply chain automation. This structure contributes to enhancing governance, transparency, and risk management in line with the requirements of the Saudi market.

The International Riyadh Market, within our assumption, belongs to the retail trade sector in the Saudi market, which is a dynamic sector characterized by high competitiveness and rapid growth. This sector includes hypermarkets, supermarkets, malls, and online platforms, forming the backbone of daily economic life in the Kingdom. The sector is influenced by several factors: population growth, rising individual income, shifts in consumption patterns, and the impact of economic reforms related to Vision 2030.

Retail trade witnessed annual growth rates ranging between 10% and 15% in 2024, supported by increased domestic and foreign tourism, the expansion of entertainment projects, and the evolution of e-commerce. The sector is also attractive to local and foreign investments and faces challenges such as evolving regulations, rising operating costs, and changing consumer preferences. This environment compels companies to develop innovative marketing strategies and expand digital services to maintain a strong competitive position.

According to hypothetical data derived from the indicators of the Saudi retail sector, the following indicators peaked in mid-2025:

- Share price: approximately 18.50 SAR (June 2025), up from 15.75 SAR at the end of 2024.
- Market capitalization: 3.70 billion SAR, based on 200 million outstanding shares.
- Price-to-earnings ratio (P/E): 18.5 times, a moderate rate reflecting a balanced valuation compared to sector averages.
- Dividend yield: approximately 1.62%, slightly below the sector average of 2% to 4%.
- Revenue growth: revenues in 2024 rose to about 2 billion SAR, with an annual growth of 11% from 2023.
- Annual net profit: 270 million SAR in 2024 (20% growth over the previous year).
- Latest quarterly results (Q4 2024): revenues of 550 million SAR, net profit of 55 million SAR, with annual growth of 15% and 18% respectively.

These indicators reflect an active growth environment, where investor confidence in the company's (hypothetical) performance is reinforced despite challenges, and profitability levels remain attractive within the sector.

The hypothetical International Riyadh Market has witnessed significant growth in revenues and profits during 2024, driven by increased consumer demand, an expanding customer base, and improved operational efficiency. Revenues rose from 1.8 billion SAR in 2023 to 2 billion SAR in 2024, while net profit increased from 225 million SAR to 270 million SAR, reflecting an improvement in the net profit margin to about 13.5%.

This growth is linked to better cost management, product assortment expansion, and success in marketing campaigns. Digitalization strategies and intensified online sales have attracted new consumer segments, especially following the COVID-19 pandemic. It is expected that, with these trends continuing, the company will maintain an annual growth rate of 10-15% in revenues and profits in the short term. However, monitoring costs, diversifying income sources, and anticipating market changes remain critical factors for sustainable financial performance.

In the Saudi retail sector, the dividend distribution policy represents an important factor in attracting investors. According to hypothetical data, the International Riyadh Market distributes approximately 60 million SAR in annual dividends, equivalent to a cash yield of 1.62%. Although this yield is lower than the sector average, it reflects a balanced policy between maintaining internal liquidity for expansion and meeting shareholder expectations.

Companies in the sector face a strategic choice between enhancing distributed profits or investing them in expansion and digital infrastructure. It is noted that the company may consider increasing the distribution ratio in the future if higher profitability rates are achieved, enhancing the stock's appeal to investors seeking continuous income. It is always advisable to review quarterly financial reports and disclosure news on the Tadawul platform to stay updated on any changes in the distribution policy.

The hypothetical International Riyadh Market operates in a competitive environment that includes several prominent local and international companies. Among the major competitors in Saudi Arabia are:

- Abdullah Al Othaim Markets (Symbol 4001): A major supermarket chain spread across several cities.
- Danube (Symbol 6010): Widely distributed grocery and consumer stores.
- Al-Rayan Markets and Al-Imdad Markets: Prominent competitors in the Riyadh area.
- Tamweel (Symbol 6004): Specializing in wholesale and retail food sales.
- Global chains like Carrefour and Lulu: Noted for their strong distribution networks and large marketing budgets.
- Online platforms like Noon and Amazon: Representing a new challenge in digital commerce.

Competition is characterized by a focus on innovation in the shopping experience, product diversity, and promotional offers. Digital transformations are pushing traditional companies to adopt advanced e-commerce strategies to face increasing competition from virtual markets.

The Saudi retail sector has witnessed a surge in digital transformation, especially after the COVID-19 pandemic, where reliance on e-commerce platforms and digital payment methods has increased. Reports indicate that the share of online sales from total sector sales reached 15-20% in 2025, compared to 8% before the pandemic.

Companies, such as the hypothetical International Riyadh Market, have sought to develop mobile applications, update websites, and launch digital loyalty programs to attract customers and facilitate purchasing processes. Investments have also been made in logistics services, such as order delivery and shipment tracking, to meet the expectations of modern consumers. Digital transformation represents an opportunity to enhance market share, but it requires significant investments in technology, data security, and training employees on modern digital skills.

The Saudi retail sector faces a range of challenges, including:

- Rising operating costs and rents.
- Changes in government regulations such as VAT and Saudization programs.
- Intense competition from local and international companies and digital platforms.

However, the sector also enjoys promising opportunities:

- Accelerated population growth and an increasing youth percentage.
- Expansion of entertainment and tourism projects, both domestic and international.
- Government support for investment in infrastructure and modern technologies.

Companies capable of innovating, improving efficiency, and providing added value to customers will be best positioned to capitalize on these opportunities and achieve sustainable growth in profits and market share.

Recent government regulations, within the framework of Vision 2030, play a pivotal role in shaping the retail sector environment. These regulations include Saudization programs, consumer protection, and e-commerce regulation. The government also supports initiatives to encourage investment in new business projects, develop market infrastructure, and motivate companies to localize jobs and develop local competencies.

The sector has benefited from government incentives such as facilitated financing, tax exemptions, and logistical support. However, compliance with new regulations requires management flexibility, investment in training, and updates to accounting and digital systems. Adherence to regulations enhances trust among investors and consumers and supports sustainable long-term growth.

Recently, several significant developments have occurred in the Saudi retail sector, including:

- Opening new branches and expanding geographical activity to enhance market share.
- Forming partnerships with tech companies to develop online sales platforms and loyalty programs.
- Disclosing strong quarterly financial results, reflecting growth in revenues and profits.
- Launching innovative products and services, such as smart memberships and rewards programs.
- Participating in government initiatives to support local products and facilitate import and export processes.

These developments contribute to enhancing the sector's dynamism and drive companies to continue innovating and adapting to market changes, positively reflecting on financial performance and competitive ability.

Expansion strategies for companies similar to the International Riyadh Market focus on several axes:

- Opening new branches in major cities and areas with high population density.
- Developing online sales channels and improving the online shopping experience.
- Diversifying products to include both global and local brands.
- Entering into partnerships with international suppliers to enhance offerings and expand options for customers.

Companies are also keen to enhance operational efficiency, employ technology in inventory management, and analyze customer data to provide tailored promotional offers. This approach enables sustainable growth, increases customer loyalty, and enhances brand value in the market.

Analysts expect the Saudi retail sector to continue growing in the coming years, supported by rising purchasing power, population growth, and the development of commercial infrastructure. Leading companies are likely to continue investing in digital transformation, expanding branches, and enhancing logistics services.

Regarding the hypothetical International Riyadh Market, it is possible to maintain an annual growth rate in revenues and profits between 10-15%, with gradual improvements in profit margins resulting from better cost management and expansion into value-added products. Continuous monitoring of regulations, competitive developments, and changes in consumer behavior are critical elements in shaping the future growth trajectory of the company and the sector.