Izzedin Ahmad Saudi Gazette JEDDAH – With countless malls opening in cities all over the Kingdom in the past few decades, consumers' shopping habits have changed. Many of them flock to malls to indulge in retail therapy and buy the bulk of their groceries. As a result, the role of neighborhood grocery stores, popularly known by their Arabic name “baqala”, has dwindled. For years, baqalas were the staple of any neighborhood but as mega malls and hypermarkets have strengthened their position in the Saudi retail sector, baqalas are struggling to survive and are resorting to selling on credit just to keep customers. Khaled Al-Harbi, a marketing expert, said many baqalas are facing the specter of closure due to a drop in sales. Figures released by the Ministry of Municipal and Rural Affairs confirm that the number of baqalas has decreased. “The role of baqalas has decreased considerably compared to the past. This is due to many reasons including the less competitive pricing schemes, limited choices baqalas offer consumers. It's very hard for small business owners to compete against large supermarkets who can offer cheaper prices and greater variety,” said Al-Harbi. Many baqalas have adapted to changing consumer habits by focusing exclusively on specific expatriate communities. “Indonesian baqalas are a prime example of business owners finding new ways to stay open. These specialized stores offer expatriate communities food and other items that they would otherwise not find in large retail supermarkets,” he added. Hussein Kaka, an Indian expatriate who has been working in a grocery store since his arrival in the Kingdom more than 20 years ago, said people prefer to purchase their groceries from large retail stores because of the presence of discounts and promotions. “Many people see it as an opportunity to take the family out. Baqalas are small and not family-friendly but you can take the entire family to the supermarket, especially if it is in a mall,” said Kaka. Baqalas are increasingly offering small credit lines to their customers in an effort to keep them from doing their shopping at large retail stores. “Of course, the people who can buy stuff from us on credit are people we have known for years. Ninety percent of baqalas have a notebook to record goods sold on credit to different customers. Most of these customers are low-wage workers and it is convenient for them to pay us back at a later date. A high percentage of grocery store sales, usually more than 50 percent, are sold on credit. In most cases, the debts are collected every month,” said Kaka while adding that many baqalas offer home delivery services as another means to win clients. Dhaifallah Al-Gharibi said his purchases from his local baqala are limited to items he either forgot to buy from the supermarket, most of which are common household food items such as drinking water and cooking oil. “Baqalas simply can no longer fulfill families' needs especially since they close at midnight while most supermarkets are open 24 hours,” Al-Gharibi said. Muhsin Abu Zaid, a Jordanian expatriate, said he purchases most of his food stuff from the supermarket because storage and cooling facilities in most baqalas are not up to par and this can cause food to rot faster. Nashwa Taher, Chairwoman of the Commercial Committee at the Jeddah Chamber of Commerce and Industry (JCCI), said neighborhood baqalas were once the basis for providing people's needs. According to Taher, baqalas continue to carry out their role despite being overshadowed by competition. “Baqalas are considered to be in the small and medium enterprises (SMEs) category. The JCCI is keen on supporting SMEs through special committees meant for this purpose. There is a special fund for SME owners in case of inability to pay debts or even death.” Taher said retail trade in the Kingdom has developed tremendously during the past few years. Large chain stores earn approximately SR170 billion in revenue, a figure that is expected to double over the next 10 years. “Baqalas need to change their marketing methods and do more to attract customers. They should create modern marketing methods and keep up with the latest developments in retail marketing,” Taher added.
