BAKERY SALES DOWN
The departure of some 700,000 foreigners has also had an impact.
Almarai's sliced bread sales were partly dented by the departure of expatriates. That helped drag down its second quarter bakery sales by 8 percent from the same period in 2017.
"There is a change taking place in this country and you cannot do change without pain," Georges Schorderet, CEO of major Saudi food producer Almarai said on an earnings call last month.
"I'm not expecting a better business environment in the short to medium term."
Businesses in Saudi Arabia's bazaars have taken a hit. In Riyadh's Batha bazaar, a popular shopping destination for Asian expatriates, business has slowed.
"Business was very good when I first came here. But now you spend days without a single customer buying anything," said 43-year-old Bilal, who runs a small eyewear and watch shop.
He said a lot of his customers were expatriates like him who are leaving Saudi Arabia. He will soon return to Bangladesh.
As of September, Saudis must make up 70 percent of the workforce in 12 retail areas including selling furniture, car spare parts, sweets, watches and eyeglasses.
The goal is to push more Saudis to work in a sector they have long shunned because of its perceived low pay but it may also mean extra training and recruitment costs for retailers.
L'azurde Company for Jewellery and Alhokair have said their operating costs could rise due to the "Saudization" of the sector.
The government also plans to ease restrictions on e-commerce, an area where Saudi Arabia trails other Gulf countries.
This could bring further change to the sector.
"The country’s young population, high connectivity rates and advanced infrastructure are projected to propel the growth of e-commerce sales over the next several years," said yStats.com, an e-commerce intelligence firm. ($1 = 3.7506 riyals)
