Turkey's Retailing Sector Analysis

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RETAILING INDUSTRY in terms of Food- Non Food

* Sectorial Overview;
Retailing is the business activity that involves selling products/services to customers for their non-commercial, individual or family use. Normally, retailing is the final stage of the distribution process. The middle and long term potential of Turkey retail industry continue remaining attractive. Companies in sector support the sectorial expansion with their expansion strategies, negative business administration fund and powerful cash creating capabilities. The defensive structure of sector and low penetration strengthen this situation. With the increase in consumer demand, rapid urbanization, increase in large scale retail investments the number of shopping malls in Turkey increased by more than 20% in the last two years. In the same period, the total surface rent area in Turkey increased by more than 30% and reached As it can be seen on the graph below; the total size of the retail sector (organized and unorganized) in Turkey is expected to reach $355 billion in 2013 and grow with 10% until 2016. (See Figure 1 in Appendix)

Organized retail, a highly promising segment due to increasing per capita consumer spending and relatively weaker presence up to now in comparison with developed markets, is estimated to be 40% of the total retail industry in Turkey. (See Figure 2 and Figure 3 in Appendix)

* The share of organized retail continue increasing;
The share of organized retail which has the level of %25 in the total retail market in 2000 exceeds the levels of %50 according to the 2013 predictions. Turkey organized retail market achieve an impressive growth in last 10 years. It is anticipated that the share of organized retailers increase from the level %47 to the level %60 in upcoming 5 years. It is anticipated that the share of organized retail increases to the level of %60 till 2015. While the food retail segment constitute more than half of total retail market, traditional structure such as local markets and groceries still dominates the market. It is expected that approximate number of 10.000 organized retail store will be twofold in 5-6 years. Besides, it is predicted that the number of groceries will be regress from 150.000 to 100.000 at the same period. Turkey, with its 105 milliard dollars sales figure, is located in 6th line in Europe retail sector. Nevertheless, while the total share of 5 biggest players in Europe is approximately %50, it is %20 in Turkey.

Organized Retail Sector is the fastest expanding canal discount merchandising. It is expected that the number of approximately 6.000 discount stores in Turkey will be twofold in upcoming 4 or 5 years. With the support of increase in the income per capita, %12 growth is anticipated in retail sector between 2009 and 2015. The discount store chain in Turkey (such as A101, ŞOK, BIM, DIASA) have a very fast growth schedules. BIM is placed in the first row in discount merchandising with its large store quantity. The company is planning to open 300 or 350 new stores every year. The fast increase in store quantities supports scale economy and companies are able to pull down their sale prices thanks to the decline in costs. With the effect of increasing competition in sector, it is expected that the growth accelerate with purchasing in forthcoming years. * Despite the high competition, the retail sector is enlarging expeditiously; 6 major organized food retailing brand constitute %37 of total market in spite of divided structure. It is expected that it will be inorganic growth, merchandising and reunions, thus the companies will achieve more competitive charges by increasing their purchasing power in 2013 and later on with the intensity of competition.

2 Major Retailing Companies in the Sector; MİGROS vs BİM BIM and MIGROS which are the prominent players of Turkey food retail sector, are analyzed in this assignment in terms of their financial analysis. In retailing...
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