Lanka Sathosa records Rs. 98 m profit in June

The State-owned largest retail chain in Sri Lanka, Lanka Sathosa, with over 320 outlets spread across the country serving the Middle and Lower income consumer groups, registered Rs. 98 million profit in the month of June and a cumulative profit for the first half year profit of 38.2 million on a turnover of 13.7 billion.

Minister of Industry and Commerce Rishad Bathiudeen said Lanka Sathosa must cross the 30 billion turnover number in 2016 and increase the number of outlets to 500 so that more people could be reached. “We must also computerise the total network of 320 outlets so that there is better management of stocks and working capital,” he said.

Lanka Sathosa, which was making colossal losses during the previous regime amounting to a staggering 1.7 billion in 2015, has seen a turnaround with a strong Private-Public Partnership model that has doubled the footfall in the last nine months, commented Lanka Sathosa Chairman Dr. Rohantha Athukorala. “Given the strong leadership from the Minister, we find it easier to implement cutting edge business strategies across the organisation.”

Sixteen items have been declared essential items which come within a band of Maximum Retail Price (MRP) mechanism that was announced last week by the Government to control the price spiral challenge in the country was spearheaded by Lanka Sathosa, which has lived up to its vision of ‘Being the price setter to the Nation’

Given the 3.6 store equity that Lanka Sathosa garners as per the AC Nielsen recent study, Lanka Sathosa prices are lower than the MRP prices announced by the Government. Sugar is available at Rs. 94/50 as against the maximum RSP of Rs. 95 whilst dhal is priced at Rs. 165 as against the price of Rs. 169 announced by the Government.

“Strong leadership from the Minister helped us turnaround the organisation that is targeting Rs. 50 billion in the years to come. After a very long time a Corporate Plan has come alive in the organisation with a focused marketing plan to back the aggressive agenda so that sustainability of the performance will happen. Sustainability is the perennial problem in public sector organisations where during the three year tenure the revival of an organisation happens and then, with the change of policymakers once again, instability sets in.”

The Minister announced earlier that Lanka Sathosa was moving towards a fully automated ERP system backed by the most modern CCTV mechanism so that control becomes a way of life. The chain is targeting 500 outlets by end of the year and a reach of 1,000 outlets within two years.