Lanka Sathosa posts highest ever Rs.12.9 bn sales from Jan-April
Lanka Sathosa has turned around in March/April owing to operational efficiency and financial discipline, according to top officials. Each month saw more than Rs.2.5 billion in sales with March regarding the highest amount at Rs.4 billion.
It has posted a revenue of Rs.12.9 billion in the first four months of the year. Against the 2019 numbers it’s a 28 per cent growth. In the retail industry which has 5–6 per cent annual growth, this is an exponential number, Lanka Sathosa Chairman, Nushad Perera told the Business Times in an interview on Tuesday. For the first quarter of this financial year against the same period in the last year, Lanka Sathosa’s gross profit grew 95 per cent to Rs.1.19 billion.
As a result the loss has come down to Rs.57 million from Rs. 991.2 million, Mr. Perera noted.
This was possible for starters, because 80 per cent of the staff had come to work irrespective of the curfew, he said. As they were an essential service, this was possible. “We were the only ones that opened from the start of the lockdown,” he said.
Secondly, improving revenue has brought about the financial discipline, according to Mr. Perera. Lanka Sathosa pruned down non-essential items and brought in all essential items which stood at a total of 1,500. Rice, Dhal, canned fish were in the floor front whereas they reduced vegetables, fruits, raw fish and raw meat. “This was because spoilage is more in these items. We ensured that all dry rations such as seven varieties of rice, dhal, soya meat, sugar, mung beans and cowpea were available,” Mr. Perera pointed out.
Lanka Sathosa had purchased these items on bulk and passed the bulk prices advantage to the customer. For instance close to 800 metric tonnes (mt) of rice was consumed for a week. So, some 3,000 mt had to be in storage. To provision this, an extra 3,000 mt had to be stored in the warehouses. As a result, Lanka Sathosa purchased 6,000 mt for a month and when bought at the bulk prices, they could pass the commodity over to the customer at the same advantage. “As a result we became the ‘price setter’ for dry rations,” Mr. Perera explained.
He said they had extended shop hours despite curfew for the essential services staff’ shopping. “About 5 million people worked during curfew. So we had a captive workforce who bought from Lanka Sathosa. Therefore, we extended our opening hours from 6 am till 6 pm.”
They went a step further and tied up with taxi service, Pick Me for deliveries from as early as March 20. “Now we do over 800 deliveries daily and two areas from Jaffna to Tangalle – wherever the Pick Me service is available,” Mr. Perera added 32,000 packs were distributed. Lanka Sathosa also improved deliveries by tying up with the Postal Department. “More than 1,500 packs were delivered during the pandemic lockdown,” Mr. Perera further added. All in all, almost 350,000 deliveries were done during the lockdown to all districts.
Lanka Sathosa also ventured into opening new outlets from February despite the curfew. “From February up to June 2, we have opened 14 new outlets. This is because people need to be served and that is Lanka Sathosa’s commitment to the nation,” Mr. Perera stressed. Now the organisation has 415,000 outlets in total and most will play a very strong role in retail, he added. “We will be investing heavily in retail and even with low margins we will still operate.” He added that with their low cost structure this is possible, noting that lean and mean structures will stand the test of time during these stressful times.