Is Turkey A Tempting Market for Supermarket Chain Business?
Turkey which is considered to be the new regional power in the Middle East now, has also been a center of attraction for global companies in the recent years.
A substantial amount of foreign capital has been invested into this country and some of the world’s leading supermarket chains have also discovered the huge potential of the Turkish market, with Carrefour, Migros, A S Watson and Metro – all setting up operations in the country.
Turkey is a big market with more than 70 million people and big opportunities. This is not to forget it’s an extremely competitive market at the same time, however
Tesco, the British retail giant for instance with an annual profit figure of £ 2,5 billion has found out that Turkey could be a key driver of long-term growth for their international expansion and marked this country as a new strategic area for the firm.
One common practice exercised by many existing companies in this market in the past was they targeted mega towns such as Istanbul, Izmir and Ankara as of major priority, which did not always bring about most favorable results.
The situation with Tesco was different though as they were clever enough to target lower profile spots such as Canakkale, Bodrum and Antalya with smaller format shops (extending an express convenience for customers) as well which could also be named as playing low-profile (or not tempting competition by avoiding it, as some experts put it).
It might be interesting to know that the writer of this article (an Istanbulite for over 60 years) was not much aware of the strong presence of TESCO with over 100 retail points in Turkey, until he became a (semi) regular customer of the big store in Viaport Shopping Mall at Kurtkoy, Istanbul, only a couple of years ago. Considering the company had already opened a lot of shops by that time and had been functioning profitably – competing rivals such as Migros, Carrefour etc – it would be well understood how successful a job they have accomplished. There is no doubt that doubled profit figures have motivated the group even more strongly.
In other words TESCO instead of going right into the center of the battle with fierce fighting had also tried alternative “developing” spots where they could do avoid tough competition of giant rivals.
To provide a few remarks about the big store at Kurtköy, it would be fair to say the product range is wide enough to address the needs of many customers, the staff are quite friendly as positive points. The prices on the other hand could not be referred to as the best among same class of stores (compared to REAL, a Metro establishment for instance) and the quality of vegatables and fruit should be improved for this class of retailer.
Just to give a rough idea about how attractive a market Turkey is, gross domestic product (GDP) per capita has gone up to US$ 10,000 and the grocery market is calculated to be worth US $ 60 billion.
25 June 2011
Editor
BUSINESS TURKEY TODAY
