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December retail sales return to pre-pandemic levels

07 Jan 2022

  • Retailers downbeat despite recovery
  • Call for free flow of essential goods
BY Shenal Fernando  Retailer turnover reached pre-pandemic levels during the recently ended festive season despite the challenging external circumstances but questions still remain regarding the sustainability of this near-term recovery, The Morning Business learns. Speaking to us, Sri Lanka Retailers’ Association (SLRA) Founder Chairman and President Hussain Sadique stated that despite the existing challenging external market conditions retailers had managed to achieve sales at around pre-pandemic levels during the recently ended festive season as people had loosened their purse strings and increased market activities and participation in functions was observed. According to him if the society is to recommence functioning under new-normal conditions and for the recent increase in consumer demand to be sustainable it is essential that new normal economic strategies be introduced in tandem with periodic reviews. He called for the Government to prioritise the import of certain essential goods which are very much in demand because if the current stat quo were to continue it could lead to product scarcity and decreasing consumer demand. Explaining further, he stated that the difficulties faced in importing essential goods has created an artificial price mark-up for goods of around 10-20% in the market which will affect consumer demand going forward. According to him this price mark-up observed in the market is not only due to product scarcity caused by difficulties in importing goods but also due to fear existing in the market. “There is an artificial mark-up because of fear, the market is in fear that the US dollar will appreciate further against the Sri Lankan rupee or that once this shipment of goods is sold they fear they might struggle to obtain further stocks or at suitable values, thus they will implement an unusual mark-up,” stated Sadique. He pointed out that the challenging external conditions have created a lot of negativity within the market which in turn is leading to more negative outcomes. Therefore, he called on the Government to be more proactive and implement a strategy to manage and utilise the existing US dollar inflows to fund essential inflows. According to him if there is a free flow of essential goods it will ensure that there are sufficient goods within the market as a consequence of which these artificial mark-ups will stop to the benefit of the consumer. He further pointed out that free flow of essential goods will ensure that the Government will get more revenue leading to economic growth which in turn will result in the increase in US dollar inflows to the country. He further stated that product scarcity due to the lack of US dollars to import goods will affect the sustainability of retail businesses. “In order for retailers to be sustainable, we need proper inflows. When you don’t have the right product, at the right time and at the right place the customers will move on, whereby we will lose sales and future opportunities. Therefore, this impacts the growth and continuity of business for retailers.” Sadique further stated that the retail business is a low margin business, due to the recent increased turnover retailers are managing to survive despite the chilling external conditions and increased taxes under the 2022 Budget. However, considering the increasing cost of living most retailers have increased staff salaries to provide some relief. Therefore, he said that the Government must consider granting some sort of relief in future to their sector as well.


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