Retailers' losses climb to Rs200b in two weeks

Lobby says early market closure, stemming from energy crunch, hits retail outlets hard

LAHORE:

Pakistan's retail sector has suffered an estimated loss of Rs200 billion in economic activity within just two weeks of enforcing early market closures, sparking strong concerns among industry stakeholders, who say the policy is hurting documented businesses while yielding minimal energy savings.

The warning comes from the Chainstore Association of Pakistan (CAP), which has urged federal and provincial authorities to immediately review the decision to shut markets by 8pm across most parts of the country.

In a formal appeal, the association said the policy was disproportionately impacting organised, tax-compliant retail outlets, including malls and chain stores, which operate under fixed cost structures such as rent, payroll and utilities.

According to CAP, the sector has recorded a consistent 25-35% decline in daily revenues since the implementation of restrictions. The drop is largely attributed to the loss of peak business hours between 8pm and 10pm, when consumer activity in urban Pakistan typically reaches its highest level.

"Consumer patterns in Pakistan are deeply aligned with evening hours, especially after office timings," said Asfandyar Farrukh, Chairman CAP, adding that early closures were not changing behaviour but simply restricting access to formal retail. He noted that while shops were forced to shut early, several other segments, including eateries and informal businesses, continue operating late in the evening, creating a mismatch in enforcement.

CAP estimates that beyond the Rs200-billion contraction in economic activity across the retail value chain, the government may also have lost up to Rs50 billion in tax revenue during the same period. It highlights that the retail ecosystem contributes nearly Rs3 trillion annually in taxes, making it a critical component of national revenue generation.

CAP Patron-in-Chief Tariq Mehboob questioned the effectiveness of the policy from the energy perspective. According to him, the commercial sector accounts for only around 8% of total electricity consumption, raising doubts about whether early closures deliver meaningful savings. He pointed out that organised retail spaces such as malls were generally more energy efficient and were operating under higher commercial tariffs, whereas shifting consumption to households could result in overall less efficient energy use.

The policy has been introduced at a time when Pakistan is navigating external pressures, including rising uncertainty in global energy markets due to the ongoing US-Iran conflict. Analysts say such measures are often adopted to curb energy demand, but their economic trade-offs can be significant, particularly in consumption-driven sectors like retail.