Boston, MA -- (ReleaseWire) -- 04/10/2014 -- Featuring a large, youthful population armed with rising spending power, Turkey continues to offer a dynamic consumer base for growth in food and drink sales over the medium term. Bearing in mind that informal independent stores still account for the majority of food sales, the trade-up to organised food retailing forms the backbone of our long-term view on Turkish retail.
Although serious challenges face the Turkish economy over the next several years, we retain a positive view on the long-term convergence prospects for Turkey, with real GDP growth expected to continue outperforming the eurozone through to the end of our 10-year forecast period. We believe economic policy reforms in the medium term will set the ground work for productivity gains beyond 2015. Significant risks will remain, however, especially as underlying social tensions between secularists and moderate Islamists are unlikely to disappear in the next decade. This has contributed to our view that Turkey will not join the EU anytime over our forecast horizon.
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Headline Industry Data
- 2014 food consumption sales (local currency) growth: +9.9%; compound annual growth rate (CAGR) 2014 to 2018: +7.9%.
- 2014 food consumption per capita sales (local currency) growth: +8.6%; CAGR to 2018: +7.0%.
- 2014 alcoholic drinks value sales (local currency) growth: +9.3%; CAGR to 2018: +7.5%.
- 2014 soft drinks value sales (local currency) growth: +9.9%; CAGR to 2018: +8.6%.
- 2014 mass grocery retail sales (local currency): +11.7%; CAGR to 2018: +9.8%.
Key Company Trends
Turkey's Alcohol Sector Suffers Further Setback: Turkey's alcoholic drinks sector has suffered another setback, following the decision by Prime Minister Recep Tayyip Erdogan's government to impose a 10% tax rise on sales of all forms of alcohol, in place from the beginning of 2014. Such a move will further damage the sector, which is still reeling from the introduction of strict anti-alcohol laws in May 2013. Abraaj-Yorsan Deal Highlights Long-Term Appeal Of Food Sector: It was announced in the week beginning January 20 that Dubai-based private equity firm Abraaj had teamed up with the European Bank for Reconstruction and Development (EBRD) to acquire a controlling stake in the Turkish dairy company Yorsan Group. Abraaj's Selcuk Yorgancioglu, a company partner in Turkey, told the Financial Times that he saw Turkey as 'the next food basket' for both Europe and the Middle East and North Africa (MENA). Yorsan is primarily engaged in the production and distribution of yoghurt, cheese and milk, according to the Financial Times - all areas where growth is coming off a fairly low base. Yorsan already owns a number of well-established brands, and in addition to domestic opportunities, the company will be able to push these brands in the wider MENA region in particular.
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