RIYADH, 11 January 2005 — With more hypermarkets opening in Riyadh this year and the government continuing with its Saudization plan, there is growing concern that the move to replace expatriates with Saudis could create instability in the supermarket sector and land customers in trouble.
“Last year alone we hired 80 Saudis, of whom only six have remained,” Adel S. Al-Habib, managing director of Arabian Marketing Co. Ltd. (Euromarche), told Arab News. He announced that Euromarche, one of the Kingdom’s biggest hypermarkets, would open a new 40,000 sq. meter outlet in the strategic Al-Nafil area off Exit 5 in September this year. Competition in this sector has revved up with more supermarket giants from France entering the race to capitalize on Riyadh’s 7.7 percent population surge as against the national average of 3.2 percent.
Al-Habib pointed out that unless the government binds Saudis to a contractual obligation, as it does in the case of expatriates, the supermarket business could be in for a jolt.
“Last year, some officials from the Labor Department came to Euromarche one night, rounded up six or seven of our expat cashiers, and put them in jail for 24 hours. Later, they were all deported. They did not even negotiate with us, nor did they give any time limit to let them find alternative jobs. There were no charges against the cashiers.”
The hypermarket chief suggested that like the expatriates there should be some provision under the law requiring Saudi employees to work for at least two years after signing the contract. Otherwise, the employers would be reluctant to hire them.
“They come and leave, come and leave,” he said, adding that the time and money invested in the Saudi manpower is going down the drain because the new kids on the block would offer them SR100 or 200 more.
Al-Habib pointed out that besides the shorter duration of service, another problem arising from the Saudization drive is absenteeism. “At one point it had gone up to 40 percent.
However, by taking disciplinary action against the absentees and rewarding those coming on time, we were able to cut down this rate to 20 percent. Also, we are recruiting Saudis from outside the Riyadh area, as they tend to be more committed than local residents,” he observed.
Referring to the upcoming branch, he said it is situated close to an upscale hospital, residential compound and a top-notch school in Al-Nafil. Asked about the level of Saudization at the main hypermarket on Takhassusi Street, he said it stands at 30 percent. The percentage would be higher at the new outlet.
Some of the senior Saudi employees would be promoted as supervisors and transferred to the Al-Nafil branch, which will have a selling area of 9,000 sq. meters and 80 shops as well as food courts, besides the hypermarket. The impending arrival of their outlet has jacked up the real estate value there by 60 percent. Responding to a question on the customers’ shopping preference after 9/11, Al-Habib said a “boycott culture” involving American products has taken roots, especially during the Bush presidency.
