Even in a turbulent year due to increased socio political
tension and the FED's revised monetary policy, the Turkish
economy retained its momentum and achieved 4% growth. GDP reached
US$820 billion in 2013 albeit the Turkish Lira devalued 20% against
the US Dollar year-on-year to December 2013.
Turkey's growth and its continuing long term potential have
led to sustained interest from investors, also in 2014, as
evidenced by the BIST 100 index remaining above 75.000 points as of
May 2014. Similarly, growth remained relatively robust in the first
quarter of 2014 at 4.3% while a decrease of 30% was achieved in the
current account deficit.
Turkey maintained its investment grade rating from leading
credit rating agencies Moody's and Fitch Ratings.
As the Turkish economy grows, the Turkish retail sector has been
one of the most appealing sectors for both investors and consumers.
Per capita disposable income grew with a CAGR of c. 9% over the
past 5 years and reached US$8,895 in 2013; it is expected to exceed
US$13,000 in 2018. Despite the significant currency volatility and
tightened credit card regulations in 2013, Turkish consumers
remained keen on discretionary spending, which drove activity in
the sector and continued to encourage a notable number of global
brands to enter the market. In this context, the Consumer
Confidence Index hit 76.00 as of May 2014.
The total size of the retail sector in Turkey is estimated to
have reached US$303 billion in 2013 and is expected to grow with a
CAGR of c. 7% between 2014 and 2018.
Growth in the retail sector is highly influenced by shopping
mall investments and the resulting increase in gross leasable area.
In the past five years, the number of shopping malls and total
gross leasable area both experienced rapid growth. Increased
competition led investors to build larger shopping malls to create
differentiation and attract a higher number of consumers.
In line with the increasing number and size of shopping malls,
organized retailers' share of the total retail market has been
steadily increasing and has reached 55% in 2013, ending the
long-standing dominance of street shops and stalls in food
Additionally, the use of credit cards continued to increase at
an accelerated pace. In 2013, the total value of credit / debit
card transactions grew by 21% year-over-year while CAGR for the
last five years is now c.15%.
Food and Beverage
Food and beverage, the largest segment of the total retail
market (44%), are expected to grow with a CAGR of 5% in the next
five years and reach almost US$150 billion in 2018. We expect to
see continued expansion strategies at the discount retailers as
well as a consolidation in the market.
The home retailing market in Turkey, comprised of household
furniture and textile products, reached US$51 billion in 2013.
Sustained growth is expected in the market considering the many
ongoing real estate development projects, nationwide urban
transformation projects and increasing urbanization. The size of
the home retailing market is forecast to reach US$60 billion in
2018, corresponding to approximately 6% CAGR in the 2014-2018
Apparel and Footwear Retailing
One of the most promising segments, which received a high level
of investor interest in recent years, apparel and footwear
retailing is expected to grow with a CAGR of 8% in the next five
years and reach US$37 billion in 2018.
Consumer Electronics and Technological Goods
Smartphone sales have become an important component of the
market for consumer electronics and technological goods, which
exceeded US$16 billion in 2013, with 5% year-over-year growth.
Boosted by rising internet penetration, an increasing number of
Turkish companies are offering online shopping and implementing
alternative payment methods. Therefore, the total volume of online
spending* through virtual point of sales networks grew annually by
40% on average in the 2009-2013 period and reached US$18 billion.
On the other hand, the total size of online retail excluding online
legal betting and holiday spending, reached c. US$4 billion in 2013
and corresponded to c. 1.3% of the total retail sales.
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