HSBC Global Research: Turkish Food Retailers Report

Rebalancing strategies: We observe that food retailers in Türkiye are rebalancing their strategies amidst ongoing challenges. The pace of space addition is slowing, specifically in the core discounter format, after years of rapid expansion. BIM is focusing on a multi-format approach, accelerating expansion of FILE (supermarket), which supports its long-term growth outlook and serves as a base for its e-grocery
foray. Migros is also strengthening its hold across formats, with key expansion across e-grocery (c22% market share in 9M25) and Macrocenter (premium grocery format). We believe market consolidation will continue, as smaller, struggling entities may exit
the market, a common occurrence after challenging trading periods.

Growth vs profitability: In Türkiye, operating leverage turns favourable for food retailers during 2H and on the back of better gross margins, and we see profitability remaining supported despite the consumer weakness. Heading into 2026, the dynamics of the food retail market will be significantly influenced by the growth in minimum wages, which will be pivotal for both top-line growth and the cost base. The differential between inflation and wage growth would be a crucial factor to consider for 1H 2026. Lower than inflation growth in minimum wages will be positive for food retail EBITDA margins, but would cast a shadow on the top-line growth expectations,
as consumer purchasing strength will reduce further. Under such a scenario, we expect promotions to take precedence, for preservation of market share.

Maintain Buy on all three: Migros is an all-inclusive grocer in Türkiye, with presence across all consumer segments and a future-ready platform. We consider BIM to be a resilient name in the Turkish consumer sector and have a positive view on the growing scale of FILE operations. Both companies offer upside potential in their valuations related to their successful subsidiaries (i.e. supermarket File for BIM and online operations for Migros) for the next few years. Our Buy thesis on Sok is driven by structural margin recovery from a low base.