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Source:
الوطن
Discounts boost rivalry
Discount stores are expanding in Madinah and other cities, attracting consumers with price cuts that compete with traditional retailers. Their profitability depends on rapid inventory turnover, increased sales and negotiating bulk purchases—not on a high margin per item. Their inventory turns over every 14 to 28 days, while payment terms with suppliers range from 30 to 60 days. The article gives this example: selling 100 packages at a margin of 50 halalas each generates 50 riyals, compared with 20 riyals from selling 10 packages at a margin of two riyals each. A lower price alone does not mean lower quality. Food products are subject to oversight by the relevant authorities, including the Saudi Food and Drug Authority. But for competition to remain sustainable, businesses must safeguard product safety and quality, strengthen consumer confidence and adhere to fair competition.
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