Saudi POS spending regains momentum with 48% rise

 Saudi Arabia experienced a notable increase in point-of-sale (POS) spending, rising by 48 percent to SR12.34 billion ($3.29 billion) during the week of June 23 to 29, 2024, according to the Saudi Central Bank (SAMA). This surge was primarily driven by significant spending increases in various sectors.

Key Highlights:

1. Education Sector:

   • Transaction Value: SR99.06 million
   • Increase: 1,970 percent
   • Contribution: Despite only accounting for 0.05 percent of total transactions, the education sector saw the most substantial growth.

2. Transportation:

   • Spending: SR790 million
   • Increase: 155.4 percent

3. Construction and Building Materials:

   • Spending: SR328.5 million
   • Increase: 110.7 percent

4. Food and Beverages:

   • Spending: SR1.88 billion
   • Increase: 38.3 percent
   • Largest Share of POS: This category, alongside restaurants and cafés, dominated POS spending.

5. Restaurants and Cafés:

   • Spending: SR1.8 billion
   • Increase: 12.1 percent

6. Miscellaneous Goods and Services:

   • Spending: SR1.6 billion
   • Increase: 62 percent
   • Items Included: Personal care, maintenance, cleaning supplies.

7. Hotel Sector:

   • Spending: SR220.3 million
   • Increase: 15.1 percent

8. Gas Stations:

   • Spending: SR834.5 million
   • Increase: 20 percent

Geographical Insights:

• Riyadh:

  • Spending: SR3.96 billion
  • Increase: 61.2 percent
  • Share of POS Spending: 32.15 percent
  • Notable Event: Introduction of the Dubai-based supermarket chain Spinneys, marking its expansion into Saudi Arabia.

• Jeddah:

  • Spending: SR1.71 billion
  • Increase: 45.3 percent
  • Share of POS Spending: 13.8 percent

• Dammam:

  • Spending: SR580.4 million
  • Increase: 58.1 percent
  • Third-Largest Share: Significant increase among the cities.

• Tabuk:

  • Spending: SR230.8 million
  • Increase: 71.6 percent
  • Highest Positive Change: Across all cities.

• Makkah:

  • Spending: SR444 million
  • Decrease: 1.1 percent
  • Only Negative Change: Among the surveyed regions.

Factors Influencing Spending Trends:

• Eid al-Adha Vacation Impact:

  • Low Spending Period: POS spending dipped to SR8.34 billion from May 16 to June 22.
  • Reason: Reduced consumer spending during vacations as many citizens performed Hajj.

• Credit Rates:

  • Decrease in Credit Rates: Contributed to increased spending.
  • Vendors' Flexibility: Sellers adjusted prices, making purchases more attractive.

Economic Outlook:

Saudi-based economist Talat Hafiz explained that the spending surge post-Eid aligns with a pattern where consumer activities intensify outside of vacation periods. The substantial POS spending rise underscores the dynamic economic activities within the Kingdom, reflecting an adaptable market responding to seasonal and economic fluctuations.