“Club of Knowledge Hunters”

Turkish retail traders pessimistic about winter

Posted by retailigence on September 11, 2008

Turkey’s retail sector, which saw stagnation in 2007 due to the global credit crunch as well as domestic uncertainties, has also declared this year “a loss”, business daily Referans reported.

The sector, which launched this year’s winter season range with prices equivalent to, or 10 percent lower than last year’s, is still facing shrinkages ranging from five to 20 percent. The increase in “square meters” is far more than turnover, said Nusin Oral, referring to the opening of new stores. Oral is the head of the Turkish Council of Shopping Centers and Retailers, or AMPD.

“Organized retail saw an increase of 22 percent in square meters, but only 12 percent in turnover within the last year. In the last few months, the gap increased to the disadvantage of turnover with a proportion of one to three,” she said. “Adding global fluctuation and political crises, consumer confidence was affected negatively, and stagnation emerged,” she continued. “September will not be a hopeful month due to [it being] the holy month of Ramadan and the change of season. We do not expect an upturn in the last three months of the year; however, a positive movement may occur in 2009.”


Leading clothing companies are trying to halt the decline in turnover through different methods. Brands that failed to attract shoppers despite offering cheaper prices than last year, such as Ipekyol and Kigili, are trying to raise turnover by opening new stores. Some brands, including Inci Deri, are offering some of their range at prices 10 percent lower than last year. “We see this year as a loss entirely, and we do not expect to see growth in retail sales in 2009,” said Yalcin Ayaydin, chairman of the Ayaydin Group. “The prices are the same as last year in the new season. We can increase our turnover only by opening new stores.”

This winter will be “faint” just as the last few winters, said Abdullah Kigili, chairman of Kigili. “Many companies are seeing losses in turnover. We are on the verge of a long-term crisis which may last two more years,” he said. Orka Group launched the season with last year’s prices, said Osman Arar, general coordinator of the group. “We have reduced costs by decreasing stocks and implemented productivity criteria. With measures, we achieved a 20 percent growth in retail turnover during the previous two seasons.”

Costs for the sector are increasing, but unit price is declining, said Ali Murad Kiziltas, chairman of Inci Deri. “Prices are 10 percent lower than last winter; however, sales are not at the desired levels.” Turkey will see the impacts of the fluctuation until 2010, he said. “The market will eventually be left to organized retail. The share of organized retail may climb from its current 30 percent to surpass 50 percent in a few years. “Turnover increase in organized retail has remained below the increase of square meter supply, according to the AMPD’s Retail Index July 2008 report, prepared by Nielsen. In July, the total increase per square meter was 24 percent while turnover increase was only five percent.

source :-Hurriyet English

Contributed by :- Vipin Rawat


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