Lak Sathosa aims to bring down COL

Lak Sathosa, a sibling of the controversial Sathosa Supermarkets, wants to become a barometer for prices with the intention of bringing the cost of living down.

“Our target market is all segments of the Sri Lankan public and we want to give essential items such as rice, sugar, flour , big onions, wheat flour, tinned fish, sprats etc at low prices,” Prasanna Weerakoon, CEO Lanka Sathosa Ltd, said.

He said that the purpose of Lak Sathosa which is completely different from the now famous budget shops is to bring in the free market competition in price. “We want to move away from controlled price concept and not operate on subsidies,” he stressed.

He said the outlets are set to turnaround by March next year and they have pumped in Rs.143 million so far to the project. “We plan to put in Rs. 200 to Rs.300 million more this year,” he added. He said Lak Sathosa will operate on 14 day stock holding unlike its previous and now defunct counterparts. He said the new company has a completely different structure where 55 percent is owned by Cooperative Wholesale Establishment (CWE) and 45 percent by the Treasury. Weerakoon said that the new structure is different to the earlier retail structure where the private sector was involved. “Earlier it was a venture between the government, the private sector and a management company ran the entity, but now only the government sector is involved,” he explained. “There is a new management structure with eight separate directors,” he said.

He cited huge stock keeping as a primary reason for the failure of the earlier Sathosa Retail. “The cost of stocks was a burden to the profits,” he added. “Also the huge operational cost of the company drained the profits. The retailers were operational for 24 hours and had moved its target market segment from the low end to the upwardly mobile more lifestyle market,” he said, adding that it was difficult for them to meet the financial obligations to the CEB and other utilities. “They could not even pay the rent,” he said.

He said that Sathosa Retail had 1080 people in 153 outlets, whereas Lak Sathosa has 423 staff for 46 outlets.

“Our aim is certainly not to give a shopping experience but help the poor segments of the country,” he added.