Implications of Adjusting Business Hours
in the Retail Sector
The retail sector in the Kingdom employs 1.6 Million people with a job nationalization level of around 25%. The right policy interventions can have the impact of improving this percentage and contribute heavily towards stipulated Vision 2030 and NTP Saudi nationalization targets.
One of the major barriers of nationalization in the retail sector is claimed to be long working hours. Several studies and social dialogues have discussed retail business hours and regulating it to 9 p.m. Also, one must note that currently working hours are not strictly enforced in small businesses.
Although discussions and recommendations have always been in favor of increased regulation; we at Strategic Gears believe that there is merit in assessing an approach that is the absolute opposite (deregulation of business hours along with the strict enforcement of working hours).
Strategic Gears observed other countries’ approaches to business and working hour regulations: and the insights suggest deregulation of business hours is the global trend. Assessing the impact of such a strategy, we concluded that it can achieve the same desired outcome of reduced business hours, while avoiding the negative side effects.
Furthermore, our researchers looked at the shopping trends by analyzing the traffic into stores around the globe and compared them with Saudi Arabia. It was found that most of the stores in other countries opt to close at night due to low demand although they have deregulated business hours. However, analyzing the customer traffic in Saudi Arabia, it can be observed that customer inflow to stores during morning hours is quite minimal compared to evening hours. Customer inflows peak during the night at around 9pm, which suggests that, unlike other countries, consumers in Saudi Arabia have late-night shopping habits. The closing of shops during prayer times is one of the contributing factors to the habit.
This calls for decision-makers to explore the possibility of deregulating business hours as an alternative.