The growth of the Turkish economy in unprecedented rates during
the course of the last decade have generated a strong demand for
consumer goods. Especially the significant jump not only in
Turkey's GDP per capita but in its disposable income came to
create such a demand for the retail sector products. Per capita
disposable income in Turkey in 2012 stood around US$ 7700 and it is
expected to grow by 50% during the following five year period.
Given such positive expectations with regard to disposable
income levels which always serves as the back bone of the retail
sector, it is no surprise to see the retail sector booming in
Turkey. The sector is expected to grow even further in line with
the expectations of growth of the Turkish economy. The size of the
retail sector was recorded as US$ 300 billion in 2012 and it is
expected to record around a 10% growth for the next five years.
Especially the staggering increase of the number of total shopping
malls all around the country which have exceeded 300 in 2012
contributed to this growth of the retail sector. The latest stats
dating back to November 2013 and issued by Turkish Statistical
Institute revealed that the retail sales volume increased by 4.5%
in August 2013 compared to the previous month. However such picture
of growth is only one side of the story.
The Challenges and the Pitfalls
Even though the sector has been in full swing during the course
of the last ten years, there are some problems that needed to be
addressed. The current account deficit that has reached alarming
numbers by the end of year 2013 combined with historically low
levels of saving rates to create a fragile state for the Turkish
economy. As a response, economic authorities have recently taken
the decision to rein in personal spending and increase the level of
saving rates to redress the issue of high current account deficit.
In line with this effort, a recent regulation has been made to
limit the credit card usage and especially to restrict the number
of installments in many of the consumer goods. This is where the
problem starts for the retail sector which heavily depends on
consumer appetite for spending and credit card usage. Especially
the extended periods of installments and discounts provided by the
banks have been instrumental for such growth in the sector.
The Need for a New Regulation
The representatives from the retail sector have recently made
their demand for a new regulation public. The problems that they
would like to address with the new regulation that they are seeking
are the issues related with strategic planning for the right
location, working hours and days to attract better educated and
qualified workforce and unfair competition. Especially the issue of
unfair competition continues to be a significant challenge for the
sector. Due to the absence of a clear regulation dealing with the
issue many wholesalers get involve in retail business by their own
arbitrary sales strategies. This leads to unfair competition as
well as VAT loses for the treasury
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