According to a recent Kantar article, Asia’s FMCG market demonstrated resilience in the first quarter of 2025, achieving solid growth in consumer spending of 2.8 per cent year-over-year, with major categories like food, beverages, and home care products performing especially strongly. Personal care experienced more moderate growth, while dairy saw a decline in value.
In Sri Lanka, as in many South Asian countries, traditional retail formats, such as small grocery shops and wet markets, continue to dominate the grocery sector, with modern supermarkets and organised retail chains capturing a relatively modest share of the market.
Understanding the FMCG Landscape in Sri Lanka’s Retail Sector
In Sri Lanka’s retail sector, the organised retail sector currently accounts for 30–35 percent of FMCG trade in metropolitan areas. However, in semi-urban and rural areas, this share drops to 10–15 percent, where small grocery stores continue to be the go-to for daily essentials. That said, we’ve witnessed a steady shift over recent years, and mom-and-pop stores are gradually giving way to modern trade formats, primarily stores between 2,000 and 10,000 square feet in size.
The pandemic caused a surge in e-commerce adoption among brick-and-mortar retailers, but this has now stabilised at a modest level, contributing low single digits to total revenue. In contrast, Quick Commerce, fueled by fast-paced lifestyles and the need for convenience, is gaining momentum, driven by the growing use of food delivery platforms.
Following the economic turbulence of 2022, Sri Lanka’s economy has begun to stabilise. The FMCG sector has now recorded eight consecutive quarters of volume growth, supported by low single-digit inflation. This has spurred demand across food, beverages, personal care, and home care categories.
Keells’ Customer-First Response to Changing Market Trends
At Keells, we are committed to improving the quality of life for the nation by delivering a world-class shopping experience. But more than that, we believe in evolving alongside our customers.
Our transformation began in 2018 with a bold rebranding initiative aimed at redefining what retail could look like for the modern Sri Lankan consumer. This wasn’t just about a new logo or colour palette; it was about recognising our shoppers' aspirations and responding with a more personalised, innovative experience.
We launched a range of exclusive products and an expanded ready-to-eat food range. Today, out of our 139-store footprint, we operate 138 in-store bakeries, 117 juice counters, and 72 prepared food counters, making us one of the largest food operators in the country.
Read more from Mifrah Ismail – Head of Commercial, Keells Supermarkets & Senior Vice President, John Keells Group in the latest issue here
