Thirty-one Lanka Sathosa outlets were closed between January 2024 and October 2025, and several profitable branches are now facing closure because their landlords want the buildings back, Deputy Minister of Trade, Commerce and Food Security R. M. Jayawardhana told Parliament on Tuesday.
He was answering an oral question from SLPP MP Chanaka Madugoda. As at mid-August 2026, 424 outlets were operating islandwide.
Profitable branches losing their premises
The Deputy Minister drew a distinction between two kinds of closure. Some outlets were shut because they had been set up in locations that were never commercially viable or market-oriented — loss-makers closed on their merits.
But others are going for reasons that have nothing to do with trading performance. The outlets at Karapitiya and Hikkaduwa closed because of difficulties over the availability of suitable space. The Thanamalvila outlet is facing closure after its building owner, former Minister Jagath Pushpakumara, requested the return of the premises.
Finding replacement locations is not straightforward. Jayawardhana said the ministry requires buildings with essential facilities including adequate parking and a minimum floor area of 3,000 square feet — a specification that narrows the field considerably in smaller towns.
Warehouses as the answer
Pressed by Madugoda, who said several essential items are currently in short supply at Sathosa outlets, the Deputy Minister set out a distribution plan rather than a leasing one.
The ministry intends to establish district-level storage warehouses across the island, one per district, to streamline distribution, imports and wholesale supply, with the aim of offering goods below the prices charged by other institutions. The first phase begins next month with a wholesale warehouse at Matara.
Context
Lanka Sathosa is the state-run retail chain used as the government’s principal instrument for holding down prices of essential goods, which makes its physical footprint a cost-of-living question rather than a purely commercial one. The closure of outlets that were trading profitably points to a structural weakness — the chain’s dependence on leased premises it does not control.
Neither report gives the total number of outlets operating before the 2024 closures began, says how many of the 31 were profitable, or names the districts that will receive warehouses after Matara.
