The latest data reveals that one-third of the income of a typical Sri Lankan household is spent on groceries, which have now shot up by 60% given the pressure on the disposable income for an average Sri Lankan. This is now even impacting the A and B social economic groups have also been impacted said Dr Rohantha Athukorala at a Keells forum recently.
In fact, for many consumer goods the year 2022 saw the overall business declining by as high as twenty percent, according to the latest data revealed by Kantar Household panel, said Dr. Athukorala.
This is the challenge that Sri Lanka is faced with in the backdrop of inflation at seventy percent and interest rates at thirty percent. Going to the specifics, he cited that those households who buy over 25 categories have dropped from 48% to 26% in the A SEC group while in the B SEC group it has dropped from 42% to 22% which is the volatility in the marketplace even on the top two tiers of the social strata, said Athukorala who heads an Artificial Intelligence company for brand mapping in Sri Lanka, the Maldives and Pakistan.
Given this backdrop, one way that a responsible supermarket chain can help the Sri Lankan household is by developing own label brands. Even though the switching from own label brands to conventional brands takes place, maybe this time around it will happen at a larger scale due to the pressure on the purse.
The current pricing strategy of Keells own branded products being priced at 10% lower than comparable brands covering multiple product categories is the right way to use this strategy as even the AB SEC groups are cash strapped as per the Kantar consumer wallet survey, said Athukorala.