Despite inflation-driven turnover increases in the retail sector, 37 percent of brands experienced a decline in unit sales. United Brands Association (BMD) President Sinan Oncel, who announced the survey results of the sector for December and 2023, pointed out that unit sales in many brands fell behind 2022. Oncel said that the decline in the purchasing power of the locals and the loss of attractiveness of Turkey for foreigners in shopping were effective in this contraction.
Announcing the December survey among its members, the BMD announced that organized retail brands achieved an average increase of more than 80 percent in their turnover in 2023 in parallel with high inflation. BMD President Sinan Oncel, who evaluated the survey, stated that December was generally productive for brands with the effect of New Year’s shopping, and that 70 percent of member brands increased their unit sales compared to November.
Stating that the months other than September and October last year were generally productive, Oncel noted the following:
“With our December survey, we also prepared a general report card of 2023 for our brands. Last year, all of our brands increased their turnover with the effect of inflation. The turnover of 57 percent of our members increased by at least 80 percent or more. Unit sales, on the other hand, lagged behind 2022 for many of our brands. 37 percent of our members declared that their unit sales decreased compared to 2022. This is an important rate. We estimate that the decline in the purchasing power of domestic customers in the last quarter and Turkey’s loss of attractiveness for foreigners in shopping were effective in the contraction of unit sales. Data from the Interbank Card Center (BKM) also supports our assessment of sales to foreigners. According to BKM data, while the share of foreigners in total card expenditures was around 10 percent in 2022, the rate remained at 6.5 percent this year.”
“There may be partial relief for 2-3 months with wage increases”
Sinan Oncel pointed out that costs and the purchasing power of domestic customers as well as sales to tourists will be effective in the performance of organized retail in 2024 and said, “With the increases in the minimum wage, civil servant salaries and pensions in January, there may be a partial relief in the purchasing power of the consumer for 2-3 months. However, if inflation cannot be reined in, we are worried that the purchasing power of the wage earners and fixed-income earners will shrink more starting from the second quarter.”