Going to the supermarket was a luxury to Sri Lankans. Now it’s a standard thing.
The year is 1980 and my father gets into his Austin Cambridge to drive to Colpetty to do some grocery shopping. Cigarette in mouth, shutters down, he drives past his usual shopping spot, the Wellawatte market. He drives further down Galle road, passing many other grocery stores that he would frequent. He’s not one to go essential shopping but today he is. It’s not the usual shopping run, today he’s driving to Colpetty to check out Cornell’s, Sri Lanka’s first supermarket. It offered many things that normal convenience stores or the municipal markets such as Wellawatte or Colpetty market did not. Here you can shop in your own sweet time, in an air-conditioned modern space set up in partnership with a Singaporean supermarket chain.
THE BIG FOUR
Over the years since Cornell’s, supermarkets have mushroomed all over the country. In terms of number, Cargills takes the lead with over 350 outlets all over the country. Their supermarkets carry the slogan “On your way home” promoting that their supermarkets are for people from all walks of life and offer a variety of products, predominantly promoting those owned by their holding company Cargills, which include Kist and Kotmale.
Keells, owned by massive conglomerate John Keells, comes second with just over 100 outlets. Their bright green branding that promotes freshness, not to be confused with eco-friendliness, though they do try. They chase after the middle class in newly developed suburbs. With initial assistance from Tesco, they lease out massive properties with ample parking space and whilst they offer more or less the same goods as other supermarkets (with a bias to their brands) they have created a more pleasant shopping experience. They want you to spend more time in their supermarket by offering fresh products via their bakery and take away kiosk.
Richard Pieris, the tyre magnate, owns the Arpico supermarket. It has goods from everyone, so you tend to find brands that you would not find in the other two, but their main differentiator is the fact that they focus on homeware such as mops & carpets, and kitchen knick-knacks such as Tupperware & table mats. Branded in blue, Arpico is the kind of place you go to when you’re on a mission to complete something at home, plus get some groceries whilst you’re at it.
Burning bright yellow is Laugfs, the newest entrant to the supermarket chain. Their primary business is gas and fuel for the house and your vehicle. Service stations need little express markets, so they started their own and it has since grown to a full-fledged supermarket chain.
THE GROCERY KADE CONUNDRUM
Despite there being over 600 supermarkets all over Sri Lanka, there are still thousands of smaller grocery stores, also known as “Kade’s” run by individual owners. Some of these smaller grocery stores have evolved from mom and pop type shops with the aid of technology. Handwritten bills are now replaced with POS systems, and stock is maintained via databases and not CR books, heck some even accept credit cards. These stores service more people, more frequently than supermarkets do. The personal touch of knowing the owner and the insight to produce knowledge is irreplaceable.
However, the small grocery stores are being threatened by the expansion of supermarkets into suburbs and city limits. If it isn’t superior product choice it will be parking space, credit card offerings, loyalty points, fresh baked goods, and a pharmacy. In Kohuwela I have the option of a Laugfs, Arpico, Cargills, SPAR and not one, but two Keells supermarkets. I favour Keells — parking and an option to accept a card are the deciding factors between going to a supermarket or the Kade.
ARE LARGE SUPERMARKETS THE WAY TO GO?
The Big Four mentioned above have plans to increase its footprint throughout the island. They are even joined by international superstar SPAR and Softlogic’s new hypermarket, Glomark. Identifying certain locations that have the possibility of developing further, either as a residential or commercial district, the big wigs are planting their seeds now. Large parcels of land on main roads are being leased, employment drives are initiated, and supply chains are improved.
In most developed countries, small to medium supermarkets are slowly being phased out for many reasons. Factors such as space cost, labour laws, minimum wage, and higher levels of service haven’t hit Sri Lanka yet — we have access to services that those in other countries would call luxury, without us even knowing it.
Maintaining a supermarket is not cheap. A global increase in property prices in urban areas, as well as the inability to get a large amount of space has led to supermarkets in other countries downsizing to a much leaner operation. In some cases, they close medium size markets and operate more express type stores, called mini-marts, in urban areas, similar to the 7-Eleven model. Driven by data, they stock the necessities and cater to those that live and work in the vicinity.
In other cases, they close all the small to medium-sized supermarkets in the vicinity and create one huge hypermarket which is complete with everything and more. Hypermarkets, as they are called, are the ultimate mecca of convenience, complete with pharmacy, alcohol stores, banks, restaurants, book stores and more. Whether you shop once a week, or once a month, a visit to a hypermarket is like going on a trip with a mission in hand, similar to how Arpico makes you feel.
Finding staff to work in a larger supermarket is becoming a factor with tighter regulation on immigration, minimum wage and hours. From a company perspective, paying someone to stock shelves whilst maintaining all regulatory terms tends to be cumbersome and in some countries not worth it. Which is why in the mini-mart model a total of 2 staff is enough to run a shift.
Sri Lanka doesn’t have these issues as the areas the new supermarkets are coming in are fairly reasonable in terms of price. Ideal land is still available in those areas that fit the bill for a supermarket. Staff is plentiful, as the larger chains offer accommodation, transport, and perks, making working in a supermarket for those out of Colombo very attractive. However, there are concerns of exploitation slowly coming into the light — for more info read here.
One of the reasons why I decided to write this article was how supermarkets and grocery stores became a common talking point due to the COVID-19 pandemic. With lockdowns and social distancing being practised, sourcing of grocery and other goods became commonplace in conversations. To adapt to the lockdown and the limitation of movement by the general populace, like the mountain came to Muhammad, goods of all sorts are now coming to every man.
Shopping for your necessities online didn’t start in 2020 — it’s been around for ages, but the current pandemic accelerated online shopping like never before. Keells Super was probably the first to embrace online shopping as far back as 2013 but didn’t focus on it too much as they wanted customers to visit the physical outlets. The initial process was frustrating with outdated prices, delayed deliveries and bad online user experience. Fast forward to 2020 and after an initial hiccough due to the demand, they now have one of the smoothest online shopping experiences.
Even chains that don’t have a digital presence are utilising the gig economy, powered by PickMe Food and UberEats, to come online. The platform that these two provide allows anyone to reach a wider audience and gave birth to many new grocery delivery businesses. There are even apps such as Yoho Bed, which normally sell hotel rooms, now also selling groceries online — a good example of adapting to market changes.
This new culture of shopping for your groceries online as well as the birth of “Essential Packs” where a vendor would have differently priced packs of goods deemed essential, such as sugar, rice, tea leaves and biscuits, has changed how people approach shopping. People are now buying exactly what they need and avoiding overbuying and buying unnecessary items as much as possible.
The primary objective of a supermarket which has a wide range of goods and gives the power of purchase to the customer is for customers to buy more than what they need.
Zipping into the supermarket for only milk but leaving with over ten items is being controlled with essential packs and online stores that sell only limited items. For luxury items such as imported cheese and designer biscuits, one needs to actively look for it on Facebook Groups and through WhatsApp dealers.
An Online Supermarket is much easier to manage than a physical outlet. There is less staff required, no need for fancy display units and multiple outlets. The Big Four are dispatching orders from outlets that are positioned in critical delivery routes which might raise the question why they would need to open more physical stores in the same area if they’re reaching customers via the cheaper, online channel.
With the new culture of buying goods online, will we see a slow down in physical outlets? Will we need to reduce the size of supermarkets to smaller mini-markets with less staff and a more outlined choice of goods, and will physical supermarkets be catered to high-end goods, the same way fashion brands had to adapt to low to mid-value online stores like ASOS and have the physical stores for more high-value bands.
I see Sri Lanka riding the supermarket frenzy for the next ten years where economies of scale will enable supermarkets to give the best deals. It’s already happening with supermarkets buying out farmers pushing middlemen out of the way for better prices which they distribute among their outlets. There will also be a rise of small single owned kade’s opening up with modern amenities such as credit card readers that will be frequented by the more conscious populace that wants to avoid fattening already rich corporations.
Online delivery will continue, especially from suppliers going direct to consumers without having to cut supermarkets their commission or consigning stock to physical outlets. COVID19 has changed the way we purchase our essentials now and for the future.