Business
Shopping is going to be a lot more painful in 2022
Bloomberg News The great rotation in consumer spending continues.
When the world shut down in 2020, we bought what we needed to stay home: Pelotons, pets, sweatpants and sourdough starter. In 2021, our shopping reflected reopening: We put on lipstick again, whitened our teeth and swapped loungewear for chinos and dresses. Most consumer, retail and luxury groups had a pretty good year.
But consumer sectors are now facing another shift in habits, and this one may not be as favorable.
The omicron variant is a headwind for travel, hospitality and retail. Even if the latest wave of infections peaks relatively soon, there are other perils ahead — from lockdown savings being exhausted just as prices are rising to tighter monetary policy and higher borrowing costs, something consumers haven’t had to endure for several years.
Already, the cracks are beginning to show.
Even before the surge in omicron cases, there were signs of consumers becoming more cautious. British retailer Currys Plc, for example, said demand for its electronics was weaker than expected. And amid fewer people heading into city centers and offices, famous London department store Harrods brought forward its sales from Dec. 26 (Boxing Day) to Dec. 17. Other metropolitan areas, such as New York City, have also been suffering.
But it’s not just the new variant weighing on shoppers’ minds. U.S. retail sales less than forecast back in November. True, some spending may have been pulled forward to October, when many retailers ran special offers and consumers shopped to avoid product shortages. But the real concern is that rising prices have finally begun to take their toll.
Up to now, consumers have been able to withstand accelerating inflation on everything from coffee to coffee tables. Many were flush with savings after being homebound for much of the past two years. But reopening economies drew down that cash.
And now prices are rising at an even faster clip. Most consumer-goods companies are already negotiating price hikes with retailers or will start in January. With inflation coming through in commodities from oil to packaging, that will make for some difficult conversations. It is also likely to lead to further spikes. U.S. food prices rose 6.1% in November, the highest level in 13 years. We could see a similar escalation in Europe.
Although wages are increasing too, U.S. inflation is outpacing it by some distance: The gap between the two is the biggest it’s been for more than 20 years.
Some of the caution Currys has seen may reflect a spending squeeze already under way in Britain. After all, a new laptop, iPhone or oven is a large purchase. In the U.S., Lowe’s Cos. said it expected the pandemic home improvement boom to finally wane.
Many people spent big during the pandemic, especially on new homes. This might be another source of weakness as interest rates rise. Higher borrowing costs are expected in 2022, which could lead Americans and Europeans to pull in the purse strings.
While large, expensive items may be the first to feel the pinch, other areas will eventually suffer too. Consumers have a tendency to trade down from big brands to cheaper private labels, or switch from meat to vegetable-based meals, when stressed about their wallets. Cutting back on indulgences that grew during the pandemic, such as ordering takeout, would be another way to save money.
There are some silver linings. Although the arrival of omicron is hurting travel and leisure, it may, in the short term, ease some of the forthcoming consumer pain. Working from home again means saving money on commuting and lunches out. Hopes for a “revenge Christmas” this year — going all out to make up for a bleak 2020 holiday — are already looking fragile, as some people cancel their restaurant reservations and plans to hold large gatherings.
January is always a grim month for retailers, restaurants and bars. It’s when credit card bills land and trends such as dry January and Veganuary take hold. But this year it could be even more brutal.
It’s a timely reminder that, like stocks, consumer rotations don’t only go one way. – Bloomberg
‘The late Mangala Samaraweera was a true democrat who staunchly opposed racism in all its forms. He was also against corruption. He was a unique person, an achiever, an artist, a creative person, well-read and practical-minded, former President Chandrika Bandaranaike Kumaratunga said. She believes that if Mangala Samaraweera (MS) lived, Sri Lanka would have been changed entirely for the better.
The former President was speaking at a special Mangala Samaraweera commemorative event held at the auditorium of the Bandaranaike Centre for International Studies (BCIS), Colombo on April 22nd, which featured the donation of Minister Samaraweera’s wide-ranging and abundant private collection of books to several Sri Lankan libraries, including that at the BCIS and the Colombo Public Library.
The programme was termed, ‘Reading with Mangala: Insights into his Personal Library and its Onward Gifting to His Fellow Sri Lankans.’ The event marked MS’ 69th birthday.
The book donation was facilitated by the family of the late minister which coordinated closely with the BCIS to make the event a success. Besides former President Kumaratunga, the event was graced by the BCIS Council of Management, public personalities, associates and colleagues of the former minister, BCIS staffers, students and well-wishers.
At the outset of the commemoration, MS was introduced eloquently and at some length to the audience by the late minister’s niece, Chanchala. MS came across to us, basically, as a multi-talented, well-read, colourful and knowledgeable personality. A resourceful person who could change things for the better.
In a panel discussion featuring many dignitaries on Mangala the person and the public figure, former President Chandrika Bandaranaike Kumaratunga mentioned the following as well: ‘Mangala had a vision for the country as a public figure and conceptualized policies in accordance with it. Among other things, he persuaded the entire SLFP to resolve the ethnic issue by political means.
‘In a survey done by a foreign company it was revealed initially that only 23 percent of the country’s Sinhala community supported a political solution to the ethnic conflict. I asked Mangala to tell me how our ideas could be taken to the public. He launched work on this project with 19 ministers. One positive result from these deliberations was the ‘Sudu Nelum Movement’ which Mangala backed to the hilt.
‘Subsequently, the message of a negotiated solution was taken to the country through innovative means, like Street Theatre and the ‘Thawalama’ campaign. Mangala gave of his best to these projects. Subsequently, in a second survey done it was disclosed that 68 per cent of the people accepted a political solution. Thus, did Mangala’s positive approach pay off. He stuck to his principles and never betrayed them.’
By Lynn Ockersz
Japan is ready to undertake fresh loan projects for Sri Lanka since the country has completed its debt restructuring process, Japanese ambassador to Sri Lanka Akio Isomata said.
“Japan is ready to consider taking on such commitments if there is a request from the Sri Lankan end but the undertaking of such projects depends on Sri Lanka’s debt servicing ability, ambassador Isomata added.
The ambassador made these remarks in response to a query raised during a round table discussion organised by the Pathfinder Foundation recently at the Taj Samudra’s Colombo Club. The theme of the event was, “Japan’s response to the US reciprocal tariffs and Japan- Sri Lanka relations in a turbulent world”. The forum was presided over by Pathfinder Foundation chairman ambassador Bernard Goonetilleke.
The ambassador also said that Japan was a victim of corruption in Sri Lanka and expressed optimism that the government would tackle the issue.
“Earlier, there were reports about some Japanese companies facing issues in Sri Lanka in securing investments. Japanese companies strictly observe compliance obligations and therefore never offer bribes or kickbacks, ambassador Isomata explained. Ambassador Isomata said that he attended the function to mark the launch of the ‘National Anti -Corruption Action Plan’ and listened to President Anura Kumara Dissanayake speaking of efforts to address the issue. The ambassador emphasized the need to implement the plan.
Responding to the President’s remarks that politicians belonging to his National People’s Power (NPP) are not involved in any form of corruption, the ambassador said it is equally important to address the same involving Sri Lankan bureaucrats.
Commenting on Japan- Sri Lanka bilateral relations, Isomata said Sri Lanka is a very important partner for Japan in many ways.” As Sri Lanka’s economy is in the process of getting back on track with efforts underway to implement the IMF agreement, along with the debt restructuring agreement, I don’t think Japanese companies will come immediately to make new investments at this stage. But as the Sri Lankan economy goes back on track in a stable manner, I think we can cultivate the interest of Japanese investors to take a closer look at opportunities in Sri Lanka for further investment. We need cooperation with Sri Lankan people, he said.
The ambassador added: “We are seeing increasing numbers of young Sri Lankans going to Japan for employment in Japanese companies. There are two kinds of programmes for inviting young foreign workers into Japan right now.
“One is called the TITP -Technical Intern Training Programme. The second one, recently started, is SSW -Specified Skilled Worker Programme. Under these two programmes, an increasing number of Sri Lankan youngsters are going to Japan right now. We have opened up eight industrial sectors for Sri Lankan workers, starting with caregiving, hotel accommodation, food industry, agriculture, construction and most recently, the transportation sector, like bus driving and truck driving. This will strengthen Japan’s labour market. We need a young labour force because Japan is facing the problem of an ageing society.”
By Hiran H Senewiratne
The SLT Group has reported a Profit After Tax (PAT) of Rs. 2,001 million for the first quarter ended March 31, 2025, a surge from Rs. 156 million in Q1 2024, reflecting effective financial management and improved operational efficiency.
SLT Group demonstrated strong performance for the first quarter of 2025, with revenue increasing 3.4% to Rs. 27,851 million. The growth was primarily driven by Mobitel’s contribution of increased revenues while SLT PLC revenue remained stable.
The Group’s cost optimization initiatives continued to yield positive results, with operating expenses decreasing 2.9% amount to Rs. 710 million compared to the same period last year. The reduction, combined with revenue growth, led to a 13% increase in EBITDA to Rs. 10,443 million.
At company level, SLT PLC reported a marginal 0.7% increase in revenue of Rs. 117 million compared to Q1 2024, primarily driven by growth in enterprise, small and medium enterprises (SMEs) and broadband streams.
SLT PLC also achieved significant cost declines, with operating expenses decreasing 5.2% amount to Rs. 838 million Year-on-Year (YoY). Notably, electricity expenses fell 38.3% following tariff reductions in March and July 2024. Vehicle hiring and fuel costs also decreased 22.7%, and repair and maintenance expenses curtailed by 12.5%.
SLT PLC specifically demonstrated impressive profit growth, with PAT increasing by 369.9% to Rs. 1,344 million compared to Rs. 286 million in Q1 2024. The notable performance was supported by a 380% surge in Profit Before Tax (PBT) to Rs. 1,920 million and a 60.3% increase in Operating Profit to Rs. 2,538 million.
Mobitel demonstrated strong financial performance in the first quarter of 2025, reporting notable revenue growth supported by the growth of data services. Total revenue reached Rs. 11.8 billion, reflecting the company’s success in capitalizing on demand for digital connectivity. Enhanced top-line performance, combined with effective cost reduction initiatives, led to a significant improvement in profitability.
EBITDA increased by 28.5%, resulting in a healthy EBITDA margin of 30%. Operating profit (EBIT) also recorded a marked improvement by 392%, with a 7% EBIT margin. PBT saw considerable growth, and the company successfully turned around its financial position, moving from a net loss in the first quarter of 2024 to a net profit of Rs. 477 million in the same period of 2025.
Reaffirming its commitment to delivering superior network experiences and the widest coverage across the island, SLT-MOBITEL Mobile was recognized as the country’s fastest 4G network for 2024 by Ookla®, the global leader in internet testing and analysis at Mobile World Congress Barcelona, held in March 2025.
Leveraging strong Q1 results as a foundation for 2025 growth, the SLT Group aims to continue the ongoing digital transformation journey delivering innovative solutions and expanding services to meet customer needs. Through operational efficiency and digital advancement, investing in advanced technologies to strengthen market position, the Group remains committed to supporting Sri Lanka’s digital economy and creating value for all stakeholders.
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