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Saudi Arabia retail slows down

Retail consumption in Saudi Arabia has slowed. In the first quarter of 2019, retail sales decreased 0.5 per cent and in the second quarter barely rose 5.2 per cent in comparison to the same period of the previous year. In recent years, the market has begun to dampen, weighed down by oil prices, which it depends greatly on. Retail faces its own challenges. Although incomes have fallen, labor costs have risen due to new administrative fees and the reduction of energy subventions. Clothing, automobile, furniture and household utensils stores are forced to ensure that 70 per cent of their employees are Saudi nationals. There has been an increase in closures of wholesale and retail companies. Although few retail companies in the region are listed, those that do publish their results have seen deteriorating results. On a positive note, the internet’s infiltration in Saudi Arabia is 89 per cent compared to 57 per cent in China, and the infiltration of this channel in some fashion groups reaches 20 per cent.

The country’s double-digit rates used to amaze the world just a few years ago. Saudi Arabia is one of the countries with the highest Gross Domestic Product per capita in the world. Its per capita expenditure on fashion is among the highest on the planet.