With consumers demanding higher quality and suppliers struggling with rising beef costs, how are the Middle East’s steakhouses faring? Caterer investigates…
Fine Dining Middle East, the company behind Ruth’s Chris Steakhouse in Dubai, has recently announced expansion plans across the region in the next two to three years. It currently owns six franchise licences assigned by Ruth’s Chris Steakhouse USA, and has just opened the second Dubai outlet.
At almost 14,000 sq ft, the impressive venue, in The Address Dubai Marina, is twice the size of the original – proof that they expected high demand from the outset.
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Serving 900 diners in the first 10 days of opening goes to show that although there are already a staggering 57 steakhouses in Dubai alone, demand is still high in the emirate, especially for the brand’s high quality offerings.
“We are pleased to say that diners in the UAE have passion for good quality steak, rather than a deal, and we are able to serve USDA prime,” says general manager Michael Szczepanski.
Choice meat
Certified Angus Beef supplier, Chihade, distributed in Dubai by Fancto, is a company that has been going for 33 years, but has seen a strong demand from the Middle East market in the last three-and-a-half to four years.
A short transit time (to transport from the US to Dubai takes just 16-20 days) and the weak dollar, as well as clear quality branding, makes the US a popular source market.
“The Middle East is still a very much untapped economy,” says Sam Hodge, beef specialist at Chihade. “Abu Dhabi, Qatar, Saudi Arabia as well as Dubai – these countries are advancing in global commerce, as is their demand for quality product.”
There are notable differences between the Dubai market and the rest of the region, points out Hodge. It’s a chilled beef market, whereas most of the rest of the region is frozen.
“Saudi has a big population,” says Hodge, “and they do demand high-end, but unlike Dubai, the range is expansive and demand for lower-end is there too.”
Also, with the price of US corn on the rise, not only from high demand of its use for ethanol, but also increasing demand from emerging markets such as China and India, the price of prime beef continues to rise. However, it is evident “people are still willing to pay for beef,” asserts Hodge.
How profitable are steakhouses?
Outlet: Seafire, Atlantis, The Palm Dubai
Covers: 7000 – 8500
Ingredients expenditure: Approximately 33% of the final price of the dish.
A note on profitability: Guest experience is based on good food and good service. We provide both. This has been evident in our business growth year on year.
Outlet: Al Boom, Radisson Blu Kuwait
Covers: 1,250
Ingredients expenditure: 34.5% of total sale.
A note on profitability: 37.8%. Al Boom revenue and profitability has been affected by the redevelopment of the hotel. However, it expects a positive impact with the upcoming completion of the project.
Outlet: Ruth’s Chris Steakhouse, The Monarch Dubai
Cover: Just over 3,000 covers per month
Ingredients expenditure: Our food cost is around 30%
A note on profitability: Always room for improvement.
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