Ceylon Cold Stores’ performance signals shift to frequent, frugal spending among shoppers

• Customer footfall has increased; however, average basket value has dropped by 3% from a year ago levels

Ceylon Cold Stores PLC (CCS), the bellwether for mid and upper-tier consumer health, reported increased revenues for the quarter ended in June 2025 from some solid performance in its supermarkets, as the customers increased their visits to the stores, signalling recovery in consumer spending. 

The margins of its supermarket business also improved from economies of scale and also the use of advanced analytics through its supply chain, the company said.

The company reported total revenues of Rs.43.19 billion for the April-June quarter, which includes revenues from food and beverage manufacturing, up 13 percent from the same period a year ago.

The operators of Keells supermarkets reported revenues of Rs.35.69 billion in the three months, up 16.9 percent from a year ago.

The company said its earnings before interest, tax, depreciation and amortisation (EBITDA) rose by 21 percent to Rs.2.45 billion. “The supermarket business recorded a strong performance during the quarter, with same store sales recording an encouraging growth of 13 percent, driven by a customer footfall growth of 17 percent. Growth was further aided by the contribution from new stores,” John Keells Holdings Chairman Krishan Balendra said in his quarterly earnings review.

The company has opened two new outlets during the quarter, bringing the total to 140 and the company said it had earmarked further locations to expand its outlet network in the ensuing quarters.

Despite the customer footfall has increased, the average basket value has dropped by 3 percent from a year ago levels, which the company attributed to a marginal decline in both the weight of purchase – the average number of units within a basket – and a decline in the retail prices. At the height of the economic crisis in 2022 and 2023, the retailer toplines soared, due to the prices going up by multiple times, in line with the runaway inflation. People had to spend many times more to buy less, as the value of the rupee came sharply down after the currency was floated and when the taxes were also raised on goods.

The company however said despite the spend per visit has reduced, the frequency of shopping to the outlet has improved.

It appears despite the rise in consumer spending; they have become cautious in their spending, as they avoid the temptation to buy things they don’t immediately need.

Growth in the same store footfall has been driven by both the existing and new customers who have converted from general trade to modern trade, given Keells’ ability to offer a diverse range of products at various price points, coupled with advantages passed on to the customers through economies of scale and its loyalty programme.

The enhancement of prepared food offering and availability has attracted new customers and has increased the shopping frequency and supported higher overall margins.

The margin improvement has further been supported by the use of advanced analytics in areas including supply chain, marketing and daily operational functions.

Meanwhile, the manufacturer of Elephant House soft drinks and other products reported revenues of Rs.8.34 billion for the three months, slipping 0.9 percent from a year ago. The EBITDA declined 16 percent to Rs.1.26 billion from a year ago.

This has been caused by the 10 percent decline in the carbonated soft drinks volumes, due to the unseasonal weather conditions. This caused the margins to narrow somewhat, due to the lower operating leverage and reduced absorption of fixed costs.

Meanwhile, the company’s confectionary business recorded a 3 percent volume growth, coming from the impulse and bulk segments. However, the margins contracted, due to the higher input costs of ingredients such as cocoa and higher advertising and promotional expenses.

Further, the company’s convenience foods business grew in profitability and in margins, driven by higher volumes, which have now recovered to the pre-pandemic levels, the company said.

The company reported earnings of Rs.1.15 a share or Rs.1.09 billion for the quarter, compared to 89 cents or Rs.1.17 billion in the same period a year ago.

John Keells Holdings PLC holds a 70.66 percent stake in CCS.