Specialty Coffee Shop
Al Salamah, Jeddah, Saudi Arabia
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- Industry
- Hospitality — café & specialty coffee
- Planned investment
- 450,000 SAR
- Business type
- New business
- Location
- Al Salamah, Jeddah, Saudi Arabia
Executive summary
Base-case ROI of 34.2% and a 16-month payback clear this project's bar for a Favorable verdict, backed by healthy gross margins typical of a specialty-coffee format and break-even volume that sits comfortably below researched local footfall estimates for the area.
This concept pairs a compact, high-throughput coffee bar with a curated pastry program and 18 co-working-friendly seats in Al Salamah, Jeddah — a high-footfall residential and office district with a young, coffee-literate demographic and no direct specialty-coffee competitor within 500 meters. At a planned investment of 450,000 SAR, the base-case scenario reaches operating break-even in month 16 and returns a 5-year NPV of 612,000 SAR at a 12% discount rate, supported by Jeddah's growing specialty-coffee segment and moderate build-out costs relative to Riyadh. Financing risk, detailed below, is the main condition to manage before committing capital.
Financial model
Gross margin
68.4%
EBITDA margin
22.1%
Net margin
16.8%
Break-even revenue (monthly)
78,500 SAR
Break-even volume (monthly)
5,230
ROI (Year 1)
34.2%
NPV (5-year)
612,000 SAR
IRR
41.6%
Payback period
16 months
Scenario comparison
| Scenario | Year 1 revenue | Year 1 EBITDA | 5-year net profit | ROI | Payback |
|---|---|---|---|---|---|
| Conservative | 720,000 SAR | 95,000 SAR | 480,000 SAR | 18.5% | 26 months |
| Base | 942,000 SAR | 208,000 SAR | 890,000 SAR | 34.2% | 16 months |
| Optimistic | 1,180,000 SAR | 312,000 SAR | 1,340,000 SAR | 49.8% | 11 months |
Year 1 by quarter (base scenario)
| Quarter | Revenue | EBITDA | Net cash flow | Cumulative |
|---|---|---|---|---|
| Q1 | 148,000 SAR | -12,000 SAR | -41,000 SAR | -191,000 SAR |
| Q2 | 212,000 SAR | 28,000 SAR | 9,000 SAR | -182,000 SAR |
| Q3 | 268,000 SAR | 61,000 SAR | 38,000 SAR | -144,000 SAR |
| Q4 | 314,000 SAR | 89,000 SAR | 63,000 SAR | -81,000 SAR |
Market & competitor research
Figures below are grounded in the same category of public and licensed data sources a real Yaqeen study cites — government statistics, cost-of-living indices, and industry data — each retaining its source and retrieval date in the full report.
gastat.gov.sa
Jeddah population and household spending benchmarks
sagia.gov.sa
Local and foreign investment licensing requirements for food & beverage
numbeo.com
Local commercial rent and cost-of-living indices
worldbank.org
Saudi Arabia retail and food-service sector growth data
Risk assessment
- • Three established café chains operate within a 5-minute walk, all with stronger brand recognition on day one — differentiation and location visibility carry more weight here than in a less saturated district.
- • Green coffee bean prices are exposed to global commodity swings; the model assumes a 6% annual cost increase, which should be revisited against supplier contracts before signing a lease.
- • Daytime footfall drops sharply during Ramadan; the model assumes adjusted hours and a 35% daytime revenue dip for one month a year rather than treating it as a rounding error.
- • A high-visibility, ground-floor unit in Al Salamah typically commands key money or a premium fit-out clause — not included in the 450,000 SAR planned investment above, and worth confirming before signing.
Conditions that need to hold true
Strengths
- • No direct specialty-coffee competitor within 500 meters
- • Compact format keeps build-out and staffing costs below the category average
- • Co-working-friendly seating supports longer dwell time and higher average ticket
Weaknesses
- • Limited visibility from the main road
- • Single-location model has no early economies of scale on procurement
Opportunities
- • Growing specialty-coffee demand among Jeddah's under-35 population
- • Room to add a roastery or wholesale line once the flagship is proven
Threats
- • Three general café chains within a 5-minute walk
- • Commercial rent in the district has risen faster than the city average over the past two years
This report is an automated feasibility estimate based on the figures and assumptions above — it is not financial, legal, or investment advice, and it is not a guarantee of business outcomes. Verify key assumptions independently and consult a qualified professional before making an investment decision.
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