The largest contributor to the surge in POS activity was the utility sector, including payments for electricity, water, and telecom services. The kingdom’s utilities market has seen significant changes over the past few years as it strives for modernization, with higher investment in smart infrastructure and sustainability. Government incentives aimed at reducing electricity costs and increasing accessibility to water have also sparked higher utility consumption, pushing more transactions through POS systems.
The jewelry sector, too, has played a vital role in driving spending. As Saudi Arabia continues to position itself as a major player in the global luxury market, jewelry sales saw a strong upward trajectory, partly due to increased demand during seasonal festivals and the wedding season. Retailers have capitalized on the growing affluence of young Saudis who are more inclined to invest in high-end fashion and luxury items. Additionally, the popularity of gold remains robust, with many Saudis viewing it not only as a fashion statement but also as a secure investment in times of global economic uncertainty.
The POS transaction growth also mirrors a positive shift in consumer confidence. The growth is tied to the Kingdom’s efforts to improve business conditions and stimulate domestic spending. Government initiatives under Vision 2030, which include enhanced support for private businesses and efforts to reduce reliance on oil revenues, have contributed to increased purchasing power and more robust economic activity across non-oil sectors.
This increase in POS spending also reflects broader changes in Saudi consumer behavior. E-commerce has seen rapid adoption over the past few years, with more consumers opting for digital payment methods due to convenience and a shift towards online shopping. The government’s push for a cashless society, highlighted by the adoption of digital payment systems such as the Saudi Payment Network (Mada), has made POS spending more efficient and widespread. The ease of digital transactions has allowed retailers to tap into a broader base of consumers who previously favored traditional cash transactions.
The hospitality and retail sectors have also seen growth, but the focus has been on utility and jewelry spending due to the high ticket value and frequency of transactions. Restaurants and clothing stores continue to thrive as well, with many consumers looking for quality experiences and fashion items that reflect their changing lifestyles. The increased demand for luxury goods, particularly high-end fashion and jewelry, is reshaping the retail landscape, positioning Saudi Arabia as a lucrative market for both international and local brands.
Despite the positive trends, experts caution that the current momentum could face challenges in the coming months. While the expansion of sectors like utilities and jewelry is a sign of recovery, uncertainties in global markets, coupled with inflationary pressures, may affect consumer behavior. Rising energy costs globally could lead to higher utility bills, potentially slowing growth in this area. Additionally, the global jewelry market remains subject to fluctuations in commodity prices, such as the cost of gold, which could impact consumer spending patterns.
The Saudi government continues to prioritize diversifying its economy and encouraging more sustainable growth. The expansion of the digital payment ecosystem and the improvement of retail experiences are expected to provide further stimulus to the economy. Experts believe the robust growth in POS spending, particularly in high-value sectors, will continue to be a key indicator of Saudi Arabia’s economic transformation under Vision 2030.