https://arab.news/rnnh3
RIYADH: Saudi Arabia’s point-of-sale spending reached around SR58.51 billion ($15.6 billion) in August, marking a 9.67 percent rise compared to the same month last year, according to the latest data.
Figures from the Saudi Central Bank, known as SAMA, revealed that 36 percent of POS spending during this period — totaling SR16.55 billion — was spent on beverages, food, restaurants, and cafes, reflecting a 4.72 percent increase. This growth was primarily driven by higher spending in restaurants and cafes.
An additional 6.2 percent, amounting to SR3.63 billion, was allocated to clothing and footwear, while health and transportation each accounted for approximately 6 percent, or SR3.38 billion, of the total.
The strongest growth in POS spending during this period was in jewelry sales, which rose by 15 percent to SR982.15 million. Telecommunications also grew by 14 percent to SR493.5 million, although it represented only 1 percent of the total share.
Expenditure on miscellaneous goods and services, including personal care, supplies, maintenance, and cleaning, saw a 12 percent increase, reaching SR6.56 billion in August.
The rise in POS spending across Saudi Arabia, particularly in the hospitality sector, is attributed to several interrelated factors that reflect the Kingdom’s ongoing economic transformation and digitalization initiatives.
As technology adoption accelerates and consumers increasingly prefer cashless transactions, businesses are recognizing the need for robust POS systems to enhance operational efficiency and customer experiences.
The hospitality industry is at the forefront of this trend, driven by a flourishing tourism sector and government efforts to diversify the economy away from oil dependence.
With Saudi Arabia hosting more international events and attracting tourists, hospitality operators are investing in advanced POS solutions to streamline service delivery, optimize inventory management, and leverage data analytics for valuable insights.
Additionally, the rise of digital payment options, driven by a young and tech-savvy demographic, is further accelerating this spending trend, as customers seek seamless and convenient payment experiences.
In this dynamic landscape, TRAY, a leader in cloud-native POS systems, has expanded its partnership with Alraedah Finance, a prominent provider of financial and digital solutions in Saudi Arabia.
Alraedah’s significant financial investment will bolster TRAY’s development of its POS technology and support for enterprise customers. Alraedah Digital Solutions will also provide expertise in data analytics, product development, and system integration. This partnership, initiated in 2023 through a reseller agreement, aims to deliver cutting-edge POS solutions to both small and medium-sized enterprises and larger companies across the MENA region.
Already, the collaboration has improved business operations for customers in the Kingdom and is set to enhance service offerings, including POS financing, while further supporting the development of the SME sector, particularly in the hospitality industry.
Declining spending
Public utilities sales, however, saw a decline of 35 percent year on year, reaching SR324.7 million. Over the first eight months of 2024, spending in this sector decreased by 23 percent compared to the same period in 2023.
This drop can be attributed to privatization efforts in the Gulf’s utility sector.
With greater private sector participation, particularly in water desalination and power generation, companies like ACWA Power have implemented more efficient technologies and renewable energy solutions, driving down costs.
Innovations such as solar-powered desalination plants and tariff reforms have reduced utility bills, encouraging responsible consumption and promoting sustainability.
Spending on electronic and electric devices also dropped by 15 percent, reaching SR878.5 million. According to SAMA data, sales in this sector have fluctuated due to factors such as seasonal promotions, new product launches, and changing economic conditions.
Figures also showed that Riyadh led in POS sales distribution in August with 34 percent, reaching about SR20 billion, followed by Jeddah, which accounted for 14 percent, totaling SR8.16 billion.
The capital’s vibrant hospitality scene, bolstered by a surge in both local and international tourism, has driven demand for advanced POS solutions in restaurants, cafes, and retail establishments.
Furthermore, significant government initiatives aimed at diversifying the economy and promoting the tourism sector have led to increased consumer activity and spending.
Riyadh’s growing population, coupled with a young, tech-savvy demographic that favors cashless transactions, further contributes to its dominance in POS spending, positioning the city as a key player in the Kingdom’s evolving digital economy.