New Market Report: Turkey Retail Report Q3 2013

The Turkey Retail Report examines the long-term potential of the local consumer market, but flags shortterm concerns about the impact on Turkey's economic outlook of the rebalancing process over the next few quarters.

The report examines how best to maximise returns in the Turkish retail market while minimising investment risk, and explores the impact of depressed economic activity in the eurozone, the US and China on the Turkish consumer, and on the ability of producers and exporters to realise returns in the short term.

The report also analyses the growth and risk management strategies being employed by the leading players in the Turkish retail sector, as they seek to maximise the growth opportunities offered by the local market.

Turkish per-capita consumer spending is forecast to increase by 38% to 2017, compared with a regional growth average of 44%. The country comes fourth (out of 10) in BMI's Central and Eastern Europe (CEE) Retail Risk/Reward Ratings.

Full Report Details at
- http://www.fastmr.com/prod/670684_turkey_retail_report_q3_2013.aspx?afid=301

Among all retail categories, mass grocery retail (MGR) will be the outperformer through to 2017 in growth terms, with sales forecast to reach US$19.19bn in 2013, and to grow much faster than overall food sales throughout the forecast period - by 63%, compared with 39% - to US$31.29bn by 2017. BMI forecasts that MGR's share of the overall food market will rise from 37.6% in 2013 to 44.0% by the end of the review period.

In the competitive arena, BMI sees upside potential in new pension and labour code reforms which should lower labour costs for businesses. Turkish rules on foreign investment are enticing to potential overseas investors, with the government promising the same benefits and incentives to foreign investors as to domestic companies.

Over the last quarter, BMI has revised the following forecasts and views:

* We have revised down our forecast for Turkish real GDP growth in 2013, from 4.0% to 3.0%. This reflects our view that a sustained loss of international investor confidence following recent social unrest and financial market turmoil will dry up portfolio capital inflows and foreign funding to the banking sector, hampering credit conditions and impeding Turkey's credit driven growth model.
* Averaging 70.8% of GDP over the last decade, private consumption will continue to be the main driver of economic growth in 2013. This was indeed the case in Q113, when private consumption growth of 3.0% y-o-y mitigated the effects of weak export and fixed investment growth on headline GDP.

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