The Kingdom of Saudi Arabia government has recently stated that they will allow stores and restaurants to extend trading hours to 24 hours a day. The announcement exhibits a positive outlook for the economy, especially in commerce as well as food and beverage sectors. This decision by the government has garnered instant praise from ranging Saudi population, from consumer to business players across the Kingdom.
The decision to allow businesses across Saudi to open all day are welcomed by many as it is believed to drive Saudi’s business landscape and bring the national economy forward. The around the clock business hours is believed to create a positive impact for the economy of Saudi Arabia by stimulating increase in capital investment, consumer spending, as well as demand for goods and services. The Kingdom, through this decision, also seeks to establish an ideal business environment for large enterprises and local entrepreneurs throughout the country.
The permission for businesses to open for 24 hours, however, comes with a fee that has not yet been announced. Businesses may choose whether they want to open all day or not, without any push from the government. Some estimation for the fees still need to be done by Saudi’s cabinet. Different fees will occur to different types of business, based on its nature of activity and public interest towards the business. Until then, it is not clear when this policy will be fully taken into effect.
Saudi’s official looks forward to reduce unemployment through the implementation of 24-hour trading hours in the country. Around 45,000 more jobs in the retail sector, as well as 45,000 additional part-time and indirect jobs are predicted to follow this decision. The government is committed to reduce the unemployment rate to 7% level from the current 11.6%, with young population as the main target of this unemployment reduction.
Many forecasts that this policy will boost the commercial activities especially in small and medium-sized enterprises across the country by 14% to 16%. Restaurants and entertainment businesses are also anticipated to increase by 11% and 9%, respectively. The prominent growth of all these sectors is expected to support Saudi in diversifying its economy and rising its population consumerism behaviour, which can help pave the way for Saudi’s economic reform in the near future.
The new policy is part of the major undergoing economic reform that are initiated by the Crown Prince Mohammad bin Salman. Under Saudi Vision 2030, Saudi government seeks to diversify its economy which currently is still relying on its oil sector. It is hoped that this policy will be able to stimulate other sectors in the country to prosper and reducing oil sector dominance in the country’s economy.
In recent years, the government has lifted a number of bans while breaking some conservatives restrictions, such as allowing women to drive, granting music concerts, and giving permission for cinemas to open. The recent arrangement to allow 24-hour trading is considered to be the latest controversial decision has been taken by the Kingdom. This undeniably presents great opportunities for businesses in the country, as it will change the way stores operate their business and consumer’s purchase behaviour. Business players across the country must now adapt to the new business environment in order to seize this golden opportunity to drive sales and revenue.