The head of the premier organisation which represents the Sri Lankan retail sector has termed 2018 the worst year for retail in a decade. Speaking to The Sunday Morning Business, Sri Lanka Retailers’ Association (SLRA) Chairman Hussain Sadique said that it has been a survival year for Sri Lanka’s retail industry, as retail growth has been in decline compared to 2017. “I would say it is the worst and most challenging year in the last 10 years. I highly doubt that there is growth in any geographical region in terms of quantity.” He added that consumer sentiment has also been hit by the prevailing political crisis and a depreciating rupee, which he believes will result in retail sales during the upcoming festive season, seeing a decline over the same period in previous years. “Obviously the crisis will have an impact on December sales. With the problem we have right now, we have already seen a decline in consumer purchases,” he said. Despite the hike in retail sales in April this year – driven by the Sinhala and Hindu New Year consumption – annual retail margin has been affected with the drastic decline recorded in consumer durable sales this year. Sadique noted that the number of retail outlets opening has also seen a major drop in contrast to how it was five years ago. According to him, the number of dining-out customers has come down, as customers prioritise value for money over high-end exclusivity. “Now, if you look at dining out, it has come down. They go to places where they have discounts and offers. Therefore, real margins have come down. Basket value is also dropping because of lower consumption.” However, the retail sector is likely to record a growth in the total value of sales driven by inflation. “With rupee devaluation, prices have gone up drastically. Thereby, sales will see a 10% growth – this will not occur because of quantity growth but because of rising prices,” he said. He expressed confidence in achieving a positive growth in the first quarter of 2019, despite the looming election cycle, but emphasised on the vital contribution of tourists to Sri Lanka’s retail sector. “2019 is going to be a positive year. We will reduce the advertising. We will have a cautious approach. If we are looking five shops, we might go for three or two shops. But it will be very challenging if we do not have the tourism, because everything is interconnected.” He was also enthusiastic about 2020 with at least five shopping malls coming in to the country that year, which will attract more customers and increase tourist spending. Meanwhile, Cargills (Ceylon) PLC Deputy Chairman and Chief Executive Officer Ranjit Page last week expressed optimism for 2019. “Year 2019 would have tremendous opportunities for the retail sector, and I am very excited and looking forward to it,” he said, speaking to The Sunday Morning Business. He made this observation addressing the 2nd Annual General Meeting of the Sri Lanka Retailers’ Association. Page, who introduced the concept of supermarkets to Sri Lanka decades ago with Cargills Food City, encouraged the opening of new shops and the introduction of new brands in order to grow the retail sector. SLRA, which operates under the Ceylon Chamber of Commerce, represents the nine sectors: FMCG, clothing, fashion and jewellery, shelter and housing, household and consumer durables, footwear and accessories, eCommerce, mobility, entertainment, and healthcare and wellness. – Madhusha Thavapalakumar