JEDDAH, 18 November 2004 — The bourgeoning number of shopping centers all over Jeddah has seriously reduced sales of many shops in the city. The effect on the local retail market is a dilution of customers and a resultant downturn in income to small retail businesses.
Hassan Ali, a salesman at a cosmetic shop in Jeddah’s Basateen Center, said sales at his shop had plummeted 50 percent this year compared with last year as a result of the growing number of shopping centers in the city. “Saudis are our main customers. The main problem is increase in the number of competing markets and shopping centers,” he added. Fouad Muhammad, a jewelry salesman at Tahlia Mall, says sales made by his shop this year were less than the previous years and also blamed the growing number of shopping centers in the city. The financial loss that many people suffered in SAWA share scam also affected sales as it affected their purchasing capacity. Many Saudis and expatriates had invested millions in Sawa shares.
Market saturation due to the widespread availability of well-known brands has also had a deleterious effect on sales. Yaakub Hamid of Bajsair Watches at Mahmal Center in downtown Jeddah said same products with same trademarks are sold at every street market and local souk.
Naji, owner of readymade dress shop that supplies international fashions in Mahmal Center said sales at his shop were less than 50 percent compared with last year. He too targeted the increase in the number of shopping centers as the underlying cause. He however pointed out that most shoppers were pilgrims who came for Haj and Umrah. “Shopping centers are now available at every corner and people go to the nearest one in order to avoid traffic,” says Ramadan Muhammad. For Abdullah Al-Ghamdi, a businessman who owns four fashions shops, sales are like last year and more but profits are less than previous years as a result of growing running costs and overheads.
He explained that he operated the shops as a group and divided the income over the four units. It had something of a stabilizing effect but was still difficult. “We have to pay rents, salaries of employees, and that takes a large proportion of the income,” he said.
Muhammad Bajunaid, another businessman, said it was important to open units at shopping centers to ensure the company’s presence in front of clients. “Otherwise clients will go elsewhere,” he added.
