Retailers’ Association calls for support
SLRA is a dominant grouping in Sri Lanka’s Organised Retail Sector (ORS), consisting of last mile retailers such as the FMCG vendors, supermarkets, clothing, fashion & jewelry, household & consumer durables, footwear & accessories, e-commerce, healthcare & wellness, entertainment, restaurants and fast-food sellers, and shelter & housing providers.
ORS plays a significant role as a collective voice within the Sri Lankan market, SMEs and employment provision. It accounts for around one-third of the GDP and over 15% of employment in the country. Vibrant retail is an essential part in the robustness of the Sri Lankan economy since the retail sector value chains’ trickle-down effects extend to the very grassroots of the supply chains such as farmers, livestock breeders and SME suppliers.
During a virtual webinar organized by the Sri Lanka Retailers’ Association on June 25th, representatives of SLRA firmly stated that the ORS is not a mere sub sector but an entire ecosystem of its own in the country, spreading out to multiple streams of sub economic strata, thus impacting on the very foundations of the country’s socio-economic makeup.
Founder / President of SLRA Hussain Sadique, emphasized on the importance of retail ecosystem’s functioning. “Modern retail has come to stay in Sri Lanka. The retail industry contributes billions to the Sri Lankan economy and supports nearly one million direct jobs and many more indirectly. This sector is a major system for Sri Lanka’s youth employment and helps addressing the burden of youth unemployment. It is also a key industry on the frontline of the COVID-19 crisis.”
“The ORS shoulders the last mile delivery burden of essentials and food during the lockdown. ORS’ economic significance is not only being the closest touchpoint system to Sri Lankan customers but also its impact in B2B levels. Annually ORS invests multi-billion-rupees for new infrastructure and pays significant property rental fees for premium high-street retail space that become a major revenue of the Sri Lankan real estate business. Therefore, this is the time that the support of the government to ORS is to be channeled. By investing to preserve this sector now, far worse social consequences would be prevented later on”, he stated.
“We are collectively calling for support measures that will enable the ORS to weather the worst of the crisis and be in a position to make a meaningful contribution towards economic recovery. The lockdowns implemented without consulting ORS has a very negative impact on it.’
“No other country closes retail systems and supermarkets during a COVID lockdown but implement them along with controls such as self-distancing. Due to non-consulted lockdown announcements, perishable stocks in ORS are destroyed overnight with multi-million-rupee losses and affecting the suppliers while retailers’ staff retention and turnover too has become very problematic.”
“Demand in retail sub sectors such as ‘consumer durables’ has increased since more consumers are now staying at or working from home and lack of consultation with ORS in lockdowns hampers their deliveries too. Therefore, keeping consumer durables outlets open is vital for the customers as well. All these would operate much better if there are wider consultations with ORS”, Sadique further added.
SLRA representatives stated that allowing the retailers to operate even during lockdown periods with pre agreed guidelines, would greatly relieve the consumers and families across the country that otherwise would face crisis to sustain their very lives. To overcome the heavy financial losses from ad-hoc lockdowns and rupee devaluation, the ORS requests the government for a reduction in VAT and a reduction in utility tariffs such as electricity which would greatly support the distressed retailers and also help them to transfer such cost benefits to the valued customers.
An extension of moratoriums given to retailers’ business loans will be critical for the speedy recovery of the sector.Furthermore, as the employees and staff of ORS perform a COVID – 19 frontline role, ORS reminds that they are facing severe health risks and urgently requests to receive the COVID-19 vaccination. Speedy implementation of these measures would help revive ORS’ smooth functioning in Sri Lanka and ease the supply and price inflation pressures that are now ravaging the local market.