Bustling no more

Stores across the Kingdom close due to economic hardships

shops market
(File photo: Jordan News)
AMMAN — Jabal Al-Hussein, known for its bustling streets and markets, has seen a prominent number of store closures and for sale signs as financial hardship bites. Merchants that have been in the commercial district for years, some for over a decade, are returning their keys and going home.   اضافة اعلان

“I started renting this shop 27 years ago, and today I am offering it for sale,” Khaled Al-Shakhshir, a shop owner in Jabal Al-Hussein, told Jordan News.

“Before 2010, I used to pay JD2,000 per year, but today the rent is JD6,000 annually.”
“On my same street, 13 well-known and old shops have closed too,” he added. 

In the last seven years, the Kingdom’s stores have seen unprecedented economic stagnation, with a significant decline in sales and revenue. 

Recently, social media users began uploading photos and videos, drawing attention to closed stores in Jabal Al-Hussein and across the Kingdom. 

Some commenters blamed harsh economic conditions and store owners’ inability to pay rent as a reason, while others voiced their disappointment in the lost efforts of the closed stores. Others said that this resulted from successive governments haphazardly raising and imposing taxes.

Common phenomenonRepresentative of the clothing sector in the Jordan Chamber of Commerce, Sultan Allan, verified that store closures are not limited to one area but are happening in several areas in and governorates. 

“The shops closing are old, longstanding commercial names,” he said. 

He said: “This reflects a major imbalance in the sector and a lack of seriousness (by those in charge) to solve the problem”.

In the next two years, the sector will completely disappear, he said. “Imports of clothing declined by 8–25 percent between 2016 and 2022,” he said. 

“Stores are even closing in malls.”

The price of online shoppingInvestor Nidal Malo Al-Ain said that soon, store closures would become more apparent for two reasons; weak purchasing power amongst citizens and the ease and affordability of online shopping. 

Vendors, he said, consider electronic commerce to be encouraging due to the lack of expenses it requires. “Tax and rent amount to zero, so the loss is minimal compared to traditional stores,” he said. 

Shakhshir explained that the growth of e-commerce could be credited to the fact that buying clothes in the current economy “has become a luxury”.

To allow stores to compete with e-commerce, Ain suggested imposing a commercial register for e-commerce merchants. He also urged the government to carry out some “tax exemption campaigns certain times in the year to stimulate the economy”.

Allan agreed with Ain.   

“The government should make an urgent decision to balance e-commerce sales with traditional sales, as well as work to address the phenomenon of street vendors in a civilized manner,” said Allan. 

 “A legal system is also needed to regulate the e-commerce market,” he added. 

Ain also suggested that the government hold shopping festivals “similar to those conducted globally”, where merchants are exempt from taxes for the festival's duration. This, he said, would lead to more liquidity. 

A buildup of economic challengesSince 2013, Shakhs’ said his rent has increased by 35 percent, a challenge many merchants have faced in the past few years. 

“We are going through an unprecedented economic recession and unfair competition with outlet shops across the Kingdom,” he added. 
“The government should make an urgent decision to balance e-commerce sales with traditional sales, as well as work to address the phenomenon of street vendors in a civilized manner,”
“There needs to be rent price and rent control.

Economist Mohamad Al-Bashir said that many sectors were also affected by the desire of people to buy from outlet shops, which have suitable prices for the consumer. Purchasing power is also an issue, he said.

Since factories produce goods in large quantities that are on standby for shipping, companies are usually left with a surplus, which they sell at very low prices, he said. 

“This negatively affects the owners of shops”, Bashir said. 

Rajab Hasan, a shop owner trying to keep his livelihood afloat, said the COVID-19 pandemic also affected citizens' purchasing power.

“Our building owner is lenient with the tenants paying the rent because he understands the difficult economic conditions.”

In the first nine months of 2022, Jordan’s total public debt increased by 7.5 percent compared to 2021. It rose by JD2.6 billion, reaching JD38.44 billion, according to the General Budget Department website.

“I am trying —really hard — not to close the shop, which has been mine and my family’s livelihood for the past 44 years,” he said.

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