Retail not catching the tailwind

The retail business has been under immense pressure to deliver in the past couple of years, owing primarily to pandemic-related closures and disruptions. Since mid-2021, the situation has deteriorated due to increased pressure on imports, which have been a critical demand for many retail enterprises. 

The retail industry in Sri Lanka is critical to the country’s economy and national retail sales in Sri Lanka are estimated to be at 13 billion dollars. It has been a rising industry in recent years, accounting for approximately 23% of the country’s GDP. This industry also accounts for 14% of the labour market in Sri Lanka, with over 1,100,000 individuals employed in this area.

The Sri Lanka Retailers’ Association (SLRA) was founded in 2015 with the goal of bringing together the resources of the organised retail industry on a single platform to encourage growth, innovation and global outreach. The association now has 50 corporate members from the organised sector, with over 5000 stores spread over nine retail sectors. 

Members of the Sri Lanka Retailers’ Association (SLRA) continue to express increased worry about the local economy’s situation and the effects of present economic conditions on the retail industry. 

At the recently finished SLRA Members’ Forum, they addressed their issues and questions to a panel of specialists. The SLRA Members’ Forum is an exclusive networking event aimed to bring together retail industry leaders with stakeholders from both the private and public sectors in Sri Lanka.

The SLRA works hard to keep member interests in mind. Our aim was to engage authorities on numerous levels in order to gain a knowledge of retail commerce and, as a result, execute retail-friendly measures. 

While we’ve had some progress along the way, given the sector’s present externalities and difficulties, we would jointly and individually continue to urge legislators for a better understanding of the sector. Retail is an ecosystem that spans the country and cuts across socio-economic strata, and it should be conserved for the better welfare of the nation and its future.

Retail is an essential component of the tourism industry and the development of Sri Lanka as a destination of choice. Regardless, thousands of retailers and related industries, such as rental properties currently occupied by these entities, logistics and related businesses providing infrastructure support to several others, such as advertising to service affiliates, would struggle to survive given the sudden drop in volumes. 

Education and communication are two other key industries that have been impacted by the forex crisis, and they, too, require essential products such as computers and communication equipment, which may end up being out of reach for the average citizen due to a lack of supply and rising import costs.

Inflation has reached historic levels in the last year. This is related to monetary supply, agricultural shocks, foreign shocks like as currency depreciation, the war in Ukraine, which influenced food and energy costs, tax rises and other factors. However, it is expected that the inflation rate would gradually decrease in the near future, therefore the current level of inflation will be maintained. Any gains from economic progress will be lost due to high living costs, hence this must be prioritised.

Many of the key concerns caused by the current economic conditions, such as tariff increases and tax adjustments must be addressed. The epidemic brought to light numerous countries, including Sri Lanka, that have experienced fiscal and current account deficits and are currently experiencing similar economic difficulties. 

It is critical that we persevere and overcome the current situation for the sake of the country. We have advocated for reforms like as State-Owned Enterprise Reform, Land Reform, and Labour Reform, among others. We must keep our officials accountable for the process in order for these improvements to be implemented.