Sri Lanka's privately owned Hiru radio channel quoting President Mahinda Rajapaksa as saying that small traders and individual sellers were being displaced by supermarkets.
"The vegetable lady (elawalu amma) that the persons who sells greens have no chance," he was quoted as saying a meeting at Sri Lanka's agriculture ministry.
"In every village they are opening.
There has to be some control of this."
It was alleged that even small manufacturers were hurt by supermarket chains.
From 2013, citizen owned supermarkets with a revenue threshold was hit by value added tax, but state-run chains were excluded.
Analysts however say supermarkets are helping reduce youth employment which is high and is taking Sri Lanka on the same path as fast growing East Asian nations have done giving better job opportunities especially for young girls.
Formal supermarkets which have air-conditioned working environments and in-house training programs also provide opportunities for career developmen