Retail industry mulls broad confidence building plan | Sunday Observer

Retail industry mulls broad confidence building plan

The Sri Lanka Retailers Association (SLRA) will seek the support of the government to develop and implement a broad plan to uplift the retail industry. The plan looks at building confidence among customers and retailers and ensure that short and long term industry activity is sustained, an SLRA spokesman said.

He said broad proposals will enable the industry to generate cash flows in the short term and help boost consumer and business community confidence.

“The key issue emerging due to recent unforeseen events is the eroding confidence of consumers and retailers. The perception of the future is negative and unless and until this cycle is broken, negative sentiments will dampen the economy further,” he said, adding that the current situation has resulted in a significant drop in retail sales and it’s our belief that if no action is taken, a revenue decline of over 30% could be witnessed in this sector directly impacting the GDP.

The SLRA also notes that besides that, this would mean a serious erosion of profits and cash flow for business establishments and the resulting cut in benefits to thousands of employees and employment in itself. This would also mean higher prices to consumers due to escalating costs and reduced activities resulting in negative sentiments continuing.

Overall, a 30% plus reduction in revenue will directly impact the taxes and related payments to the government thus having a significant impact on government revenue collection too.

The retail sector essentially comprises of almost the total products and services that goes directly to the end consumers. It is not only the point of end customer interaction but also a channel for all products and services to end consumers

TheSri Lanka Retailers Association (SLRA) membership comprises over 5,000 outlets being served directly throughout the country and many thousands of secondary retailers who are part of the eco system. Besides these, the online retailers have a significant presence and influence through their e-tailing platforms. From a revenue perspective, SLRA members would account for a very significant share of the total retail pie in Sri Lanka.

The total number of retail outlets in Sri Lanka is estimated to be over 100,000 including the smaller mom and pop type shops and measures taken in the right direction at this juncture will help restore confidence in most of them.

Around 35% of the Sri Lankan GDP comprises of activities pertaining to retail trade in all forms.

The SLRA represents the majority of the large organised retail sectors which represent the length and breadth of the country through its large branch network giving employment to many thousands and giving a lifestyle shopping experience to thousands of households across the country. The credit growth of the corporate sector has been negative for the past quarter and with the events of April and May, one could safely assume this to further erode future retail expansion and investments very weak. This would also mean that the retail trade which gives great impetus to tourism and overall GDP growth will not have the same outlook thus not taking off to rebuild the economy fast.

- LF