Q: How have the dynamics of the macroeconomic environment impacted branding in general?

A: Strictly from a Sri Lankan point of view, consumers have faced many challenges since the pandemic, which compelled them to curb spending. Then right when we thought things would stabilise and the market would be revived, we were hit by the economic crisis. This was far more critical than the pandemic because people physically didn’t have products – it wasn’t too long ago that we were in gas and petrol queues.

All this created a lot of disruption in people’s lives – they lost their jobs and therefore, rethought their entire lifestyles. Many brands had not planned for this.

So right now, we are all stuck in a situation where consumers face issues in fulfilling their daily requirements and retailers have to face restrictions on imported items.

To counter these issues, we’re working with brands to introduce more economical solutions to the market. For example, we previously introduced one kilogramme packs but are now looking at 200g/100g economy packs. LAUGFS Supermarkets had to adapt by offering competitive prices and emphasising the value proposition of our products.

In challenging times, consumers seek stability and reliability. As a part of one of the country’s leading conglomerates, LAUGFS Holdings, we were able to enhance our brand perception by showcasing our resilience and commitment to customer satisfaction across the group.

Pravin R-David
Chief Executive Officer

Q: How is Sri Lanka’s economic crisis impacting brand investments?

A: Brands, including LAUGFS Supermarkets, faced challenges in allocating resources for brand investments such as marketing campaigns, product innovations, customer experiences and expansion. For instance, construction and equipment costs have tripled, and everything has gone up in price from what we initially budgeted so we had to stop and recalibrate so to speak.

Overall packaging costs have gone up on essential goods such as eggs, oil and milk powder, which in turn impacts the production costs that are ultimately borne by end customers. The focus has shifted to cost optimisation, maintaining competitive pricing and ensuring operational efficiency to navigate the economic crisis, while maintaining brand presence and customer loyalty.

Q: What is your definition of brand loyalty?

A: The world has changed quite a bit – especially the grocery retail sector. Gaining brand loyalty is tough as consumers are always looking to get the best deal.

From a brand point of view, LAUGFS Super has been looking to reposition itself as a supermarket that provides destination shopping, which is a transformation from being perceived as a top-up destination.

This requires a lot of infrastructure changes, and backward integration with farm communities and SMEs. We want to bring their products to the supermarket and give them a window, which we didn’t focus on as much previously.

From a Sri Lankan perspective, we all need to come together and support local manufacturers because in a time of need when we didn’t have imported products, it was these manufacturers that stepped up. So we need to build brand loyalty for Sri Lankan brands. It’s not something that can happen overnight but over a period of time, we can become more self-sufficient as a country when it comes to food.

“The world has changed quite a bit… Gaining brand loyalty is tough as consumers are always looking to get the best deal”

Q: How is the competition looking for LAUGFS Super?

A: The grocery retail market is worth approximately Rs. 1.4 trillion, of which modern trade accounts for only 20 percent. There is enormous growth potential given the consumer segments that are not shopping at supermarkets due to perceptions related to price and other matters.

Consumer shopping habits have also changed and we want to meet these needs. For example, LAUGFS Super is the only supermarket that runs 24/7 in a few areas because we want consumers to be able to walk into the store even at 1 a.m. and pick up their groceries.

We are also looking at strengthening our brand by offering basic healthcare and wellness services, delivering superior customer service, enhancing loyalty initiatives and investing in community engagement.

Q: What are the future plans for your brand?

A: As we see a consistent improvement in middle income earners’ and people’s willingness to spend, there is room for growth outside the Western Province. We’ve planned to revamp our home brands in the near future, and improve services at our Crimson bakeries and Medz pharmacies to better suit customer needs. Improving our online presence and investing in e-commerce are also priorities with a focus on sustainability.

– Compiled by Avanti Samarasekera

Telephone 0773 139999  |  Email pravind@laugfs.lk  |  Website www.laugfsholdings.com/super