The store that built your business is now your most expensive asset to run.

The latest GASTAT retail figures for early 2026 (excluding car sales) show a widening gap. Retail revenue grew 9.64% over the year. But staff costs grew 11.42%. That’s not companies choosing to invest in better-paid talent. It’s a tight labour market and the rising cost of meeting local-hiring rules. When wage costs climb faster than sales, it means retailers are paying more just to keep the doors open.

The efficiency gap is widening

You can see the squeeze by comparing two GASTAT measures over time: retail revenue against staff pay. In early 2023 the ratio was below 1.0 — revenue was actually trailing pay. It then peaked in early 2024, when an 18.49% jump in sales easily beat a 5.27% rise in wages. Since then it has slipped every year. By early 2026 it hit a three-year low.

The trend is clear. Running retail on lots of staff and lots of floor space is getting harder to justify at today’s wage levels.

Where the growth actually is

At the same time, online retail has become permanent infrastructure — and it offers a way out of the wage squeeze. The GASTAT e-commerce sales index grew 88.06% over three years, rising from 91.86 points in early 2023 to 172.76 in early 2026. Yes, the yearly growth rate has cooled, to 18.38% in early 2026 from over 31% through 2025. But that’s just a bigger starting base, not a market running out of room.

Revenue no longer grows in step with headcount. So the smart money stops chasing more stores and starts buying automation.

What this means for retail leaders

The takeaway is simple. Sales no longer rise just because you add staff. So the right move is to shift spending away from opening new stores and toward two things: automated fulfilment hubs, and software that routes stock and orders locally. Both lower the long-term cost of getting a product to the customer — the cost that wages are now driving up.

The open question for any Saudi retail board is one of timing. The store network that built your business is becoming your most expensive asset to run. How long do you keep expanding it before you start spending that money somewhere else?

Sources

General Authority for Statistics (GASTAT). 2026. Retail Trade Indices, Q1 2026 (excluding motor vehicles): Operating Revenue, Employee Compensation, and E-commerce Sales. Riyadh: GASTAT.