After weeks in lockdown with access to stores and malls restricted, Saudi shoppers found themselves under a time crunch to hunt for deals ahead of a planned increase in the Kingdom’s Value Added Tax (VAT) on July 1.
According to reports, recent days saw large crowds of bargain hunters and savvy spenders at malls and storefronts across the Kingdom. The National interviewed several Saudis who were shopping for various items and goods across the Kingdom in recent days and weeks, and the takeaway is clear: Saudis are stocking up and seeking deals after months at home and a price increase on the way.
A young Saudi girl shops at a local store in the Kingdom.
Starting July 1, VAT in the kingdom will triple from 5 to 15 percent, part of an effort by the government to raise funds to soften the effect of low oil prices and the global pandemic on public finances.
According to The National, the recent weekend in Jeddah “saw crowds hit the city’s major shopping centers like the Red Sea Mall, Arab Mall and Andalus Mall. Many went for luxury goods, including watches, jewelry and expensive cosmetics at department stores.”
Some even rushed to buy new cars, the report said.
It wasn’t just the Saudis who were savvy ahead of the VAT rise. Storeowners and proprietors, sensing an opportunity, lowered their prices and announced last-minute sales in order to lure larger crowds.
According to Reuters, inflation recently eased to around 1% due to low demand for non-food items and reduced fuel prices, but some analysts expect it to surge by up to 6% year-on-year in July due to the VAT hike.
