There will be a 44 percent decline in sales if shops close at 9 p.m., a study conducted by the Jeddah Chamber of Commerce and Industry to discuss the impact of the decision, said.
The study said business would drop by 44 percent as the decision would lead to a reduction in working hours — five hours or even less per day.
The study said the new proposal, if implemented, might lead to a reduction in the number of jobs by 57 percent in showrooms and shops for both Saudis and expatriates, while the layoffs among employees connected to logistics may reach 61 percent.
In addition, the proposal to close shops by 9 p.m. will lead to non-utilization of the assets — shops, showrooms — and will consequently push retailers to reduce operating costs by cutting the number of existing jobs at showrooms, shops and stores in order to survive and carry on their business, the study said.
The study pointed out that the increase in sales was necessary to meet the expenses — the rent and staff salaries. The expenses become heavy burden for traders, and thus with the implementation of the new shop closure schedule traders will be compelled to offer discounts to attract more shoppers during working hours as compensation for their losses.
The study said there was the possibility that businessmen would lose interest in investment that will eventually lead to a decline in the growth of Saudi retail sector, which contributes immensely to the growth of the national economy.
It predicted higher borrowing costs, which will reduce the ability of retail companies to pump more funds in their businesses. This will result in the national economy experiencing more pressure that may lead to economic crisis.
The implementation of the new shop closure timing will lead to higher unemployment because many retail outlets will be forced to reduce the number of male and female employees. It will also decrease the employment opportunities in the retail and real estate sector, the study concluded.
