Turkey Retail Report Q2 2015
BMI View: We retain a positive growth outlook for the Turkish retail sector in 2015 and beyond. Totalhousehold spending will be spurred by the growth of the economy and rising income of consumers. Weanticipate that 2015 and the next four years will mark the expansion of the largest retail chains into thecountry's periphery as well as the further intensification of competition in the cities.
Turkey continues to emerge as a centre of influence and economic gravity in South Eastern Europe.
However, it is set to face several external challenges in 2015. The political and economic crisis in Russia isaffecting most of the country's trade partners. According to the Turkish Statistical Institute, Russia isTurkey's third largest origin of imports, with the total value of USD2.3bn of goods bought by Turkishcompanies and consumers in 2014. If the turmoil in Russia prolongs, the retailers in Turkey are likely to beforced to look for new trade partners. The eastern neighbours are unlikely to becoming adequate substitutes:
conflicts in Syria and Iraq have a negative impact on the country's economy, especially in the easternmostregions. Turkey, as the most-developed country in the northern part of the Middle East, serves as a refugefor Syrians and Iraqis fleeing their homes from the on-going conflicts in their respective countries. Inaddition, the plummeting oil price and the sharp shift in the dollar-euro exchange rate in late 2014 and early2015 is changing the dynamics of the retail market. While a large part of the industry exports to eurozonecountries and receives payments in euros, the consumers end up paying dollar-related prices in the retailmarket. Euro-related income and dollar-related expenses are likely to influence the household purchasingpower in 2015.
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