Early market closures threaten formal retail, tax revenues

The organised retail sector represents over 30,000 outlets and contributes a significant share of the trade’s 18 percent to GDP, while supporting more than one million jobs

LAHORE: (UrduPoint/UrduPoint / Pakistan Point News-April 15^th, 2026) Following the first week of implementation of reduced retail timings, the Chainstore Association of Pakistan (CAP) has highlighted the serious challenges faced by the organised retail sector and urged the government to adopt a balanced approach to support formal businesses operating under increasing economic pressure.

The organised retail sector represents over 30,000 outlets and contributes a significant share of the trade’s 18 percent to GDP, while supporting more than one million jobs. A key concern raised by the trade body is the restriction on retail operating hours, particularly the enforcement of an 8:00 PM closing time across most of the country and 9:00 PM in major cities of Sindh and Khyber Pakhtunkhwa.

Initial data from member retailers indicates a significant disruption to peak-hour sales (8:00 PM to 10:00 PM), with a drop of approximately 25–30 percent in daily revenues. Consumer footfall remains concentrated in post-work hours, typically from 7:00 PM onwards, highlighting a structural mismatch between current restrictions and actual behaviour. In comparable urban markets in Asia and the middle East, retail outlets in malls and high streets typically operate until at least 10:00 PM, enabling businesses to capture peak evening demand.

These disruptions are already translating into business revenue losses of up to an estimated PKR 100 billion per week. The association noted that the retail value chain generates approximately PKR 3 trillion annually in sales and income taxes, and any decline in activity appears to be reducing tax generation by up to PKR 25 billion per week.

The situation is already affecting operations, including staffing cuts and constrained inventory cycles, indicating growing operational and financial stress. Reduced retail hours may also fail to deliver proportional energy savings, as consumption shifts to less efficient domestic usage, while commercial establishments remain more energy-efficient and pay the highest tariffs.

Patron-in-Chief CAP, Rana Tariq Mehboob, stated: “Pakistan’s organised retail sector is already facing multiple constraints, including rising costs of doing business, particularly fixed rents and overheads, increased regulatory actions, and a lopsided tax burden on Tier-1 retailers. These challenges are disrupting business sustainability and supply chains, including manufacturers and allied industries. Frequently implemented timing restrictions are further impacting compliant businesses. The timings for the restaurant and retail sectors should be aligned; otherwise, energy and fuel savings remain minimal, especially when malls and markets continue to operate until at least 10 PM to serve dining customers.”

Chairman CAP, Asfandyar Farrukh, added:
“The organised retail sector contributes substantially through economic output and taxes, yet the current environment is badly impacting business continuity. Reduced operating hours not only affect retailers but also lower government tax collection. Organised retail has consistently advocated for a reasonable closing time of 10 PM, except during festivals and public holidays, rather than extended late-night activity. A balanced approach is needed to support both revenue generation and business sustainability.”

The retail trade supports approximately 10 million jobs, and prolonged restrictions are already placing a significant portion of the second-shift workforce at risk.

Mehboob reiterated that a more effective approach by the government is essential to prevent further weakening of the retail sector. CAP urges a revision of operating hours, such as shifting opening times to 12 PM while maintaining evening operations until 10 PM, to better balance energy objectives with economic activity.

The association has appealed to the Prime Minister and Provincial Chief Ministers for immediate intervention, including greater flexibility in retail operating hours, to support the domestic economy, protect jobs, and maintain tax revenues.