Retailers’ Association urges immediate action to revitalise sector

The Sri Lanka Retailers’ Association (SLRA), the apex body of organised retail in Sri Lanka, has raised growing concern about the current standing of the local retail sector.

If the retail sector collapses completely, it will greatly affect its larger ecosystem that depends on retail, penetrating deep into the length and breadth of the country,” SLRA said in a release.

The financial and social repercussions will be unprecedented and the loss of employment alone will be disastrous.

The local retail sector accounts for over 30% of the national GDP and 14% of direct employment in the workforce. Over 10% percent of households in Sri Lanka depend on employment in the retail sector. A large section of the employment in this sector includes sales, cashiers, and lower mid-segment jobs, which are vital to keeping the country’s economy afloat and providing deeper penetration of income streams across the country as well.

Currently, many small and medium-scale businesses are either closing down or preparing for eventual foreclosure, while their larger counterparts continue to navigate through the prevailing conditions, under stress.

SMEs account for 52% of the local GDP and the sector is currently in dire need of funding to stay afloat. However, those funds are difficult to obtain due to interest rates of up to 34%, which diminishes their margins greatly. Additionally, given the import restrictions and inability to bring adequate forex to the country, the future looks bleak for the whole sector. Especially, as prices of food and other essentials would skyrocket as any smaller players would have to operate at much higher costs than normal.

SLRA President Murali Prakash said, “It is important that we come together with authorities, policymakers and stakeholders and work towards replenishing the local retail sector, as it is the backbone of our economy.

The Social Security levy charged on basic essential items has further increased the burden on consumers. SLRA recommends excluding the levy on essentials to provide relief to consumers.

The SLRA urges the government and authorities to set up a system to facilitate the continuation of the retail sector business through a planned set of actions.

A 100% fail-proof framework based on monthly availability that could be considered to rejuvenate the retail sector would ensure imports and provide a means of managing the current uncertainty in the country.

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Author: shehan

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