Local retail industry: the hardest hit by the FOREX crisis calls for solutions

The retail industry has been under tremendous pressure to deliver during the past one and a half years,mainly owing to closures and disruptions due to the pandemic.The situation has been exacerbated since mid-2021 due to increasing pressure on imports, which has been a core requirement for many retail businesses.

The current FOREX crisis and the resultant import restrictions have pushed many of these businesses to the brink of collapse. The situation is moving from bad to worse, with many large entities struggling to keep their branches and facilities open due to a lack of goods for sale. If this continues, it is likely to result in the closure of stores, severely impacting the livelihood of many directly and indirectly dependent on these businesses.

Retail is an integral part of the tourism industry and building Sri Lanka as a destination of choice.Notwithstanding, the business losses to thousands of retailers and the affiliated industries such as rental properties currently occupied by these entities, logistics and related businesses providing infrastructure support to several others, such as advertising to service affiliates, would be hard-pressed to survive given the sudden drop in volumes.

The Sri Lanka Retailers’ Association (SLRA) calls on the government and authorities to effectively bring about a system to facilitate the sector’s business continuity through a planned set of actions.One option to consider would be an allocation of FOREX to this sector based on what is available for a given month; thus, there is a particular element of certainty on imports and to manage the uncertainty that prevails currently, to be better.It is also imperative that authorities work out modalities to address the situation where FOREX availability improves soon.