Sri Lanka experienced an economic crisis in 2022 with hyperinflation and severe import restrictions due to a lack of dollars. Many retailers struggled to meet demand with the country experiencing severe shortages, including for key products such as food and medicines.
While COVID-19 fears subsided in 2022 and restrictions were lifted, Sri Lanka continued to experience significant challenges. A major factor was Russia's invasion of Ukraine and its wider impact on the global market and the supply of food and energy, with these markets being key suppliers of grain, oil and gas, among other things.
Informal retailing remains strong in Sri Lanka, particularly for fresh produce and apparel. Wet markets, known in the Sinhalese language as Pola, are present in both urban and rural areas and are often the only available source of vegetables, fruit, meat and fish for rural consumers.
Inflation is expected to stabilise by 2024 easing economic pressures and living costs and providing baseline conditions for economic growth in forecast period. As a result, retail is expected to see steady and stable growth over the forecast period in value terms (at constant 2022 prices).
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Understand the latest market trends and future growth opportunities for the Retailing industry in Sri Lanka with research from Euromonitor International's team of in-country analysts – experts by industry and geographic specialisation.
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Data and analysis in this report provides further detailed coverage dedicated to the following key categories, where applicable:
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Retail is the sale of new and used goods to consumers from a business for personal or household consumption from retail outlets, kiosks, market stalls, vending, direct selling and e-commerce. Retail is the aggregation of Retail Offline and Retail E-Commerce. Excludes specialist retailers of motor vehicles, motorcycles, vehicle parts. Also excludes fuel sales, foodservice sales, rental transactions, and wholesale sales (e.g. Cash and Carry). Sales value excluding or including VAT/Sales Tax. Retail also excludes the informal retail sector. Informal retailing is retail trade which is not declared to the tax authorities. Informal retailing encompasses (a) sales generated by unregistered and unlicensed retailers, i.e. retailers operating illegally, and (b) any proportion of sales generated by a registered and licensed retailer that is not declared to the tax authorities. Unregistered and unlicensed retailers operate predominantly (although not exclusively) as street hawkers or operate open market stalls, as these channels are harder for the authorities to monitor than permanent outlets. Activities in the illegal market, which is usually understood to refer to trade in illegal, counterfeit or stolen merchandise, are included within our definition of informal retailing. Activities in the “grey market”, which is usually understood to refer to trade in legal merchandise that is sold through unauthorized channels – for example cigarettes bought legally in another country, legally imported, but sold at lower prices than in authorized channels – will be included as informal retailing if no tax is paid on sale by the retailer. However if the retailer pays tax – for example on cigarettes bought legally in another country but sold at a lower price than standard – the sale is included within formal retail.See All of Our Definitions
This report originates from Passport, our Retailing research and analysis database.
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