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Wednesday, 9 March 2011






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Government Gazette

Marketing and selling in favourable economic conditions:

Modern retailing takes root

Prasanna Perera

The retail industry is the largest industry globally and many are not aware of this fact. In Sri Lanka, we are observing a boom in the retail industry with the rapid expansion of supermarket chains, clothing chains, electronic stores, footwear stores and IT stores. In this brief article, my endeavour is to examine the factors that are triggering this resurgence of the retail industry.

Sri Lankan economy

The growth of the Sri Lankan economy in the post conflict phase, has been a major driver for the retail industry. With the boom in the tourism industry, the entire economy has received a tonic, with investment benefits spreading across communities.

The rapid infrastructure developments across the country has resulted in new townships and opportunities for setting up retailing business.

Consumer lifestyles

Sri Lankans are travelling overseas more regularly and are also exposed to global trends through television and satellite and cable networks. This has made Sri Lankan consumers westernized in their thinking to shop at modern retail establishments. Consumers are preferring one-stop-shopping destinations, which offer convenience, choice and comfort. (3 C's). The result is a boom in modern retailing, with rapid expansions across different retail formats and locations.

Expansion of retail establishments

We are beginning to see the advent of Hypermarkets (Mega Supermarkets), through the expansion of Arpico Supercentre's . The latest in Wattala is truly a hypermarket with over 60,000 sq.ft. of retailing space. Cargills Big City and K-Zone (managed by Keells) are also good examples of hypermarkets.

Mega supermarkets growing rapidly

The number of supermarkets are growing rapidly with Cargills Food City (150 outlets) Keells Super (45 to 50 outlets), Arpico Supercentre's (08 outlets), Laugfs Supermarkets (25 to 30 outlets) and Lak Sathosa (over 225 outlets).

The supermarkets have changed the face of retailing forever in Sri Lanka. In general, a supermarket mainly focuses on food and beverage and should have app 4,000 sq.ft. of retailing space.

Clothing chains have also grown across the country with NOLIMIT (12 outlets), Glitz (four outlets), ODEL (14 outlets), Fashion Bug (15 outlets) Kandy's (eight outlets) Cool Planet (three outlets), Cotton Collection (three outlets) to name a few.

Even in Consumer Durables, Singer, Abans, Softlogic and Browns have expanded their showroom network. Singer has developed a multi channel retail network, namely Singer Plus, Singer Mega, Singer Homes and Sisil World. Abans has the Elite showrooms and Abans showrooms. Softlogic has the Softlogic Max showrooms.

Based on the evidence I have provided, you would no doubt agree that there is a definite retail boom in the country.

What Impact will modern retailers have on the traditional retailers (Kade's) ?

Traditional retailers will need to upgrade their entire offering, or else they will simply disappear! There is definite evidence of traditional retailers upgrading with many 'Super' outlets emerging. For example Kamal Stores has become Kamal Super and Nihal Stores has become Nihal Super etc.,

These traditional retailers have been forced to upgrade, with the supermarkets being set up, in close proximity.

Traditional retailers who refuse to upgrade are gradually disappearing from the market.

My view is that modern retailers have helped upgrade retailing standards across the country.

 A busy supermarket aisle

The Future Modern retailing has come to stay in Sri Lanka, thereby offering a better quality of life to Sri Lankans. My belief is that the future will see global retailing chains entering Sri Lanka, such as Tesco, Walmart, Courts, Big Bazaar, Shopper's Stop, Mohamed Mustafa to name a few.

Together with the Shangri-La's, Movenpick, Four Seasons and other star class hotel chains, these retail chains will change the landscape of Sri Lanka forever.

Marketeers of all categories of products and services will do well to ride the retail bandwagon , or else run the risk of being left behind.

There are new skills that Marketeers of today need to harness to capitalize on the retail boom.

These skills include merchandising and displays, category management, sensory marketing and branding, loyalty marketing, eTailing to name a few.

With the rapid growth of the modern retailing industry, the balance of power will shift to the consumer. With traditional retailers (Kade's) the mudalali and shop keeper had the power.

This is a significant strategy perspective for marketeers, in terms of the marketing mix and budgets.

"The world is driven by the retail industry, the largest Industry globally." (Author)



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