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| Tuesday, 3 February 2004 |
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Making Sathosa the common man's shopping paradise once more by Chandani Jayatilleke Has the Sathosa's new management been able to achieve its goals and attract more consumers since it changed hands from the government to the private sector, two months ago? Or are they still struggling to restore its past glory, and focus its image as the common man's retail outlet in the country?
On the surface, there hasn't been any major visible change in Sathosa outlets, according to many consumers. With the announcement of Sathosa privatisation and as it entered its final stages of privatisation of the retail unit, Sathosa went through a sluggish period till December last year. Its stores ran out of goods and other consumer items and naturally, the consumers opted to go to other supermarkets and retail outlets which were full of goodies. This became a major issue among consumers and this sudden departure of consumers from Sathosa was a visible fact. The new management of Sathosa is now challenged with the daunting task of reinstalling itself as a market leader. As Sathosa outlets complete two months under their new management - a consortium which consists of Richard Pieris, Carsons and Munchee, we took time to find out its present status and future plans for the common man. The Sathosa outlets are flooded with goods, and the prices are comparatively reasonable. Yet, the presence of consumers purchasing goods was not very high - we noticed at a glance, as we visited some of its outlets in Colombo. However, the CEO of Sathosa Retail Ltd (SRL) - the management arm of the 150 Sathosa outlets around the country, Jeremy ferreira says that they have seen a remarkable growth in consumers, returning to their outlets from November 2003 to January 2004. "There has been an overall 100% growth in customer returns," he says. Sathosa retail outlet chain consists of super markets and self service outlets. And at one time Sathosa as a retailer enjoyed the largest market share in the country. Today, other players have overtaken Sathosa's position, pushing it to second or third position in the market. Supermarket concept is quite a competitive field in Sri Lanka with many newcomers entering the business and offering attractive prices for essential food items. With a wide range of supermarket chains in the country, today, the consumer is faced with a fairly substantial choice for marketing. Its growth over the last few years has been phenomenal, with a 30% growth each year. "Since we took over, we have been able to regain the confidence of the consumers. Initially it was lower, but we have seen it increasing gradually." The most visible change in Sathosa outlets today, according to ferreira is the shelves full of goods. "We have also introduced effective management skills, better suppliers and reasonable pricing structure to improve Sathosa's sales," he says. When we took over in December, we were aware of the fact that Sathosa consumers were moving away to shop in other supermarkets and retail outlets. But our idea was to get the shelves full. Then we can ask customers to come back. Therefore, the growth is happening gradually, according to ferreira. In the future, SRL plans to streamline its supplier network and buy as much as from the producer or the farmer directly. This is to ensure that both the farmer and the consumer gets the best price for their goods. The SRL is currently in the process of strengthening relations with farmer organisations and stipulating certain quality standards for the produce, so that they could guarantee the quality. In April, the SRL will launch a major rice purchasing program in Anuradhapura. This is to support the paddy farmers and provide competitive prices for paddy farmers, ferreira says. The SRL has allocated Rs. 15 million to carry out an aggressive advertising campaign to focus Sathosa as the 'supermarket of choice'. "Our aim is to be the super market for everyone. Well.. we would like everybody to choose Sathosa as their shopping location. Therefore, we do not want to cater to one particular segment." To fulfill this concept, Sathosa has already introduced a 'food basket' trade deal for consumers where they get a selected number of essential goods in a basket at a lower price. However, as marketing 'Gurus' say, the consumer is king and judge and he/she would decide where to go and what to buy at the end of the day. The retail managers' duty is to create the purchasing platform to match the consumer's decision. Having this in mind, it is Sathosa's responsibility to rebuild its image as the premier retail chain of the ordinary consumers in the country. When we compared the prices of some of the essential food items in a few supermarkets in Colombo, we found that Sathosa offered the second best prices after ordinary retail shops. Two other supermarkets we visited had higher prices than at Sathosa. Sathosa prices included (as at 29.01.04 per kg) Rice (samba) Rs 36.00, Flour Rs. 26.50, Lentils Rs. 59.00, B Onions Rs. 59.00 and Sugar Rs. 34.00. |
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