Top 3 Challenges affecting the retail market in Saudi Arabia

In 2018 we have seen an economic slowdown in the retail sector in Saudi Arabia due to various economic reform and restructuring such as the introduction of Value Added Tax, and the increase of dependent fees for expatriates which resulted in a higher cost of living in the country and also led to a decrease in the household purchasing power. At the same time, we have seen a big reduction of foreign workers due to the new Saudization regulation within 40 activities in the retail sectors. Adding to it, there is a new trend for online shopping which has grown expeditiously in the last two years with the online platform players such as SOUQ/Amazon and Noon which has created a consumer’s awareness and a shift in their spending behaviors to shop online.


1-     How to drive growth/ footprint in the retail shop?

2-     How to sustain and retain Saudis in the work environment?

3-     How to leverage from the online shopping experience?


To overcome these challenges, companies could:

  • Create a tailored make training program and workshops for employees, which will help the consumer shopping experience to be more pleasant and at the same time increase the consumer footprint.

  • Make use of the existing online platform to display and sell their products to maximize exposure and scale up their business across KSA by minimizing their operational expenditure.

  • Or, empower women workforce since they have better work ethics than men. 


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