Turkish shopping malls: No V shaped recovery here!

Turkey 400 plus strong shopping malls collect timely data on visitor traffic and sales, which is arguably the timeliest indicator of private consumption. While   mall investors and shop owners associations disagree on turnover in the first full month of reopening, no matter how one slices it, interest is weak.

After  the full  opening of the shopping malls, as of June 1, mall investors and retailers remain divided about  turnover rates. Shopping mall investors claim that firms have reached 60 percent of regular turnover, while retailers argue that sales remain at 35 percent of pre-pandemic level.

The shopping malls and retailers, which opened partially in May and fully as of June 1, are trying to heal the wounds of the coronavirus. Although the outbreak has calmed down somewhat, its continuation is reflected in consumer behavior. Shopping mall investors claim that, thanks to  the safety measures taken, retailers have reached 60 percent of the pre-pandemic in sales. The United Brands Association (BMD), which has more than 400 member companies and collects information about the turnover of the members every week, argues that this rate is around 30 percent.

Hüseyin Altaş, the President of the Shopping Investors Association (AYD), said that the number of visitors reached 40-45 percent compared to before the pandemic, and 60 percent in sales. Expressing that the figures are close to expectations, Altaş said that Father’s Day contributed to the number of visitors by 2 percent and to the turnover by 4 percent. “At the end of June, we achieved 60 percent of the number of visitors before the pandemic and 75 percent of the turnover at the end of June”.

“Retail at 35 percent”

Ready-to-wear clothing brands is one industry which is still suffering. Sinan Öncel, President of the United Brands Association, pointed out that they survey member brands every 10 days, and according to the survey results, the brands have only reached 30-35 percent of the turnover before the pandemic. Öncel said that low tourist arrivals impact the decline, “changes in consumer behavior occurring in Turkey are moving in a similar manner with the rest of the world. People do not shop except for their urgent needs. It will take time for this behavior to return to normal. The share of tourists in ready-to-wear retail is also quite high. The absence of tourists this year is also an important factor in this decline.”

Turnover in tourist resorts is low

With close to 370 stores serving Turkey as well as the US, Germany and in countries such as Canada; denim maker Mavi’s CEO Cuneyt Yavuz said they reached a sales figure close  to their expectations. Yavuz said, “Shopping is speeding up visibly,  but is it enough? We are coming out of a big crisis and any  improvement in shopping regulations and conditions make us happy. Sales differ by region. Sales in cities such as Kayseri on the Anatolian side are similar to  pre-pandemic days, but lower in touristic-summer places such as Antalya, İzmir, and the Aegean Line, as well as in shopping malls where tourist turnover is high. If we had reached 50 percent of sales  before the pandemic, we would said that it was a good start. We are just over 50 percent now.”  Stating that they supported franchisee stores and employment during this period, Yavuz said: “We are operating in Russia, Germany, Canada and the USA with Mavi. There, sales are going parallel with Turkey. We made significant investments in the USA, and we saw the benefit of this. Despite the social restrictions, sales are good. ”

Emphasizing that they also benefit from digitalization in Mavi, Yavuz stated that the sales, which were only 5 percent of total online, increased by 2 times in this period to reach 10 percent.

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Published By: Atilla Yeşilada

GlobalSource Partners’ Turkey Country Analyst Atilla Yesilada is the country’s leading political analyst and commentator. He is known throughout the finance and political science world for his thorough and outspoken coverage of Turkey’s political and financial developments. In addition to his extensive writing schedule, he is often called upon to provide his political expertise on major radio and television channels. Based in Istanbul, Atilla is co-founder of the information platform Istanbul Analytics and is one of GlobalSource’s local partners in Turkey. In addition to his consulting work and speaking engagements throughout the US, Europe and the Middle East, he writes regular columns for Turkey’s leading financial websites VATAN and www.paraanaliz.com and has contributed to the financial daily Referans and the liberal daily Radikal.