Pakistan shuts down Utility Stores network after decades of subsidised retail

ISLAMABAD: The Ministry of Industries and Production has ordered the permanent closure of Utility Stores nationwide, ending decades of subsidised retail operations that served millions of low-income households.

The shutdown, effective July 31, halts all sales and procurement activities, according to a formal notification issued on Thursday.

Under the directive, inventory from the stores will be shifted to central warehouses, while information technology systems and other physical assets will be auctioned transparently. Notices have been issued to vacate rented premises starting August 1.

The decision follows a federal government directive to discontinue the Utility Stores, which had been struggling with inefficiency and financial losses. The stores, once a key outlet for subsidised essentials such as flour, sugar and cooking oil, faced mounting criticism for poor service delivery and leakages in the subsidy regime.

Prime Minister Shehbaz Sharif has directed the rollout of a Voluntary Separation Scheme (VSS) to cushion the impact on employees losing their jobs. Officials said the closure aims to streamline subsidy disbursement through more targeted programmes such as the Benazir Income Support Programme (BISP), which is being positioned as the primary social protection platform.

Utility Stores Corporation had operated hundreds of outlets nationwide since its inception in the 1970s, but shifting policy priorities and persistent financial strain ultimately sealed its fate.