Early Market Closures Cost Pakistan Rs100bn Weekly Sales

Pakistan’s formal retail sector is warning of heavy economic losses after government-imposed early market closures sharply reduced sales activity across major commercial centres, with retailers estimating a weekly decline of around Rs100 billion in documented business.

The closures, generally requiring markets to shut by 8:00pm to 9:00pm, were introduced as part of energy conservation and austerity measures. However, retail representatives say the policy has disrupted shopping patterns instead of meaningfully cutting consumption, particularly in cities where most buyers visit markets after working hours.

According to the Chain Store Association of Pakistan, formal retail sales have fallen by 25 to 30 percent across nearly 35,000 outlets. The association has also warned that thousands of point-of-sale-integrated businesses could come under pressure, while reduced operating hours may affect workers’ income and trigger layoffs in second shifts.

CAP Chairman Asfandyar Farrukh told Dawn that the policy has not reduced overall consumption but has pushed buyers toward informal markets that continue operating late. He said this shift hurts documented sales, weakens point-of-sale collections and reduces income tax and sales tax receipts that the government needs during a difficult fiscal period.

Retailers argue that the measure has created an uneven commercial environment. While efficient and tax-compliant shops close early, restaurants, entertainment venues and informal markets continue to attract late-night customers, limiting potential energy savings and diverting trade away from registered businesses.

The association has proposed extending retail hours until 10:00pm, bringing restaurant and entertainment timings into line with shops, and introducing daylight saving time. Retail representatives believe advancing the clock by one hour could save energy without choking documented commercial activity and may generate estimated annual savings of nearly $500 million.

The issue has gained urgency as Pakistan faces inflationary pressure linked to regional instability and rising energy concerns. Retailers say shoppers are not panic-buying in the traditional sense, but many families are trying to keep essential supplies stocked because they fear price hikes or shortages if the Strait of Hormuz crisis worsens.

Lower purchasing power is also changing consumer behaviour. Instead of buying the same brands and quality levels, many households are moving toward cheaper, unbranded or lower-quality goods. This trend signals pressure on household budgets and could further weaken formal businesses that rely on predictable demand.

Market analysts are also watching inflation closely. Rida Fatima of Sherman Securities expects headline inflation in April to reach 10.2 percent year-on-year, compared with 7.3 percent in the previous month, while monthly inflation is projected to rise by 1.8 percent.

The dispute now places policymakers between two competing priorities: conserving energy and protecting formal economic activity. Unless the government revises market timings or creates a uniform system across commercial sectors, retailers warn that documented sales, tax collection and employment could remain under pressure in the weeks ahead.