Softlogic announces entry into supermarket business
Diversified conglomerate Softlogic Holdings PLC, which has interests in retail, healthcare, financial services, leisure, IT and automobile sectors said it would soon enter into the supermarket business, which the group considers a natural extension to its retail business.
“We are currently setting up our supermarket operation, which we reckon to have a substantial growth potential. Supermarket is a natural extension of our retail business where we hope to capture more market share in the retail wallet under one loyalty platform of ’Spend and Burn points’ across all Softlogic companies,” Softlogic Group Chairman Ashok Pathirage said in his earnings review on the group’s performance for the quarter ended June 30, 2018 (1Q19).
At one point, speculation was rife that Softlogic would partner a foreign supermarket operator to launch its supermarket business.
Sri Lanka’s supermarket space is currently dominated by Cargills, Keells and Richard Pieiris Group. A distant fourth player would be the supermarket chain operated by Laugfs Group. The State also has a hand in the business with Sathosa stores, which focus on low-income earning consumers.
Independent food retail chain, SPAR International, last year granted licence to Ceylon Biscuits Limited (Cbl)—the manufacturer of Munchee biscuits—to operate the SPAR brand as SPAR Sri Lanka in a joint venture with the SPAR Group Ltd South Africa.
SPAR Sri Lanka has announced plans to open 20 SPAR supermarkets within a five-year period. The first of such was opened in Thalawathugoda a couple of months ago.
Meanwhile, for the 1Q19, Soflogic Holdings reported earnings of 5 cents a share or Rs.49.7 million, which is a 14 percent increase compared to the same quarter of the previous year.
The revenue for the period rose 5.5 percent year-on-year (YOY) to Rs.16 billion.
“The period under review continued to reflect many challenges due to economic slippage, the high interest rate and tax regime, and the weakened rupee which led consumer demand and market sentiment to depress further”, said Pathirage.