Turkey presses strained retailers for price freezes ahead of elections

ISTANBUL, Jan 19 (Reuters) – Turkey’s unusual request that its retailers partially freeze prices ahead of elections has prompted some supermarkets and industry groups to warn they could only do so for a short period.

Finance Minister Nureddin Nebati asked clothing and shoe stores to launch their discount season well ahead of usual March after grocers had done the same.

After almost six months of public calls from President Tayyip Erdogan’s government, the country’s largest market chains began a month-long price freeze and some cut prices this month.

Yavuz Altun, chief executive of 200-store chain Happy Center, said discounts for shoppers will depend on how much more the chain had to pay its suppliers. “We could accommodate hikes up to a certain point, however there is a limit” he said.

Annual inflation hit a 24-year high of 85% last year and prices were up 64% year-on-year in December.

The cost-of-living crisis is a top concern for voters ahead of a tight vote in May, and the government has sought to soften the impact with record spending on social aid and a 55% minimum wage increase since July.

The pressure on retailers is the latest attempt to rein in price growth without touching interest rates, which Erdogan insists – at odds with mainstream economists – must be low to bring inflation down.

The central bank held its key rate at 9% on Thursday.

It is unclear though, how long the retail price cuts will last.

“For now, the stable lira is supporting us and could allow discounts of 10%-30% until March,” said Altun. “However, albeit minimal, the increase in minimum wages will lift prices.”

Reuters Graphics

CHEESE AND MEAT

Nebati said earlier this month he was pleased that some market chains have heeded calls for discounts. “I’m now calling on all retailers and asking them for similar steps,” he told a business group.

Under pressure, Turkey’s largest market chains including A101, BIM (BIMAS.IS), Carrefoursa (CRFSA.IS), Migros (MGROS.IS) and SOK (SOKM.IS) froze or cut prices of hundreds of products for January.

An industry body representing 5,000 local markets then followed suit.

Yet after years of high and volatile prices, some shoppers want permanent solutions.

“There are no discounts on staple items like cheese and meat, which is still too expensive,” said Mujgan Askan, 49, from Western city of Kirklareli, adding that the discounted products were hard to find.

Seref Fayat, head of TOBB apparel industry council, said the aggressive interest rate cuts boosted demand and may end up driving up prices by up to 30%, rather than cooling them.

Price cuts “are not possible, especially now that we are in the run up to the elections and monetary easing permeates everywhere,” Fayat said.

“After the minimum wage hike, retailers will want to take advantage of this relative increase in purchasing power. They will also want to reflect rising costs in price tags, which they have not yet done.”

Analysts say it is difficult to judge how discount campaigns will affect voters.

“The impact will mostly be psychological,” said Adnan Akan, Retail and Consumer Leader at PWC Turkey.

“January is the month for wage hikes. Think of price freezes like a booster for purchasing power.

Looking from the government’s point of view, it is a smart choice.”

Reuters Graphics

Reporting by Ceyda Caglayan and Can Sezer; Editing by Jonathan Spicer and Tomasz Janowski

Our Standards: The Thomson Reuters Trust Principles.

Tags:

anker listed on couponmatrix.ukholland-and-barrett listed on couponmatrix.uklancome listed on couponmatrix.ukpure-gym listed on couponmatrix.ukqp-jewellers listed on couponmatrix.ukteva listed on couponmatrix.uk
anker listed on couponmatrix.ukCharge faster, charge better. Anker is your go-to for wireless, car and portable chargers, featuring an ultra-sleek design and unprecedented speeds. We’ve tracked down the very best offers, seasonal sales and Anker discount codes to help you upgrade your charging game for less. Power your camping fridge, smartphone, laptop and more—whatever you need, there’s a smart, fast charging device by Anker.
holland-and-barrett listed on couponmatrix.ukHolland & Barrett is one of the world's most trusted names in health and wellness, and with good reason—this retailer has been supplying vitamins, supplements, health foods and natural beauty products for more than 140 years. Make the most of a Holland and Barrett discount code to cut the cost of your next shop! Whether you’re looking to tone up, boost your immunity or get glowing skin, you’ll find natural remedies from trusted brands when you shop with Holland and Barrett.
lancome listed on couponmatrix.ukIf you’re talking sweet perfume and gorgeous cosmetics, you’re talking Lancôme. As authentic as the French forest its named after, Lancôme offers only the finest fragrances, makeup and cosmetics for true beauty connoisseurs. If you want to feel pampered like royalty without the salon price, stay thrifty and shop with the latest Lancôme discount code from Groupon. When it comes to scents, never accept second best, let it be Lancôme.
pure-gym listed on couponmatrix.ukPump up your gym experience and elevate your performance with Pure Gym. With over 350 gyms nation-wide, it’s easy to sign up and start working out. Thanks to your Pure Gym promo code, you can save on flexible memberships, hundreds of classes, and take advantage of top-of-the-range equipment. No matter where you’re at in your fitness journey, Pure Gym offers a supportive and welcoming atmosphere for all members. Plus, all Pure Gym locations are open 24 hours a day, so it’s always ready when you are.
qp-jewellers listed on couponmatrix.ukQP Jewellers is a leading online jewellery retailer, offering an extensive range of fine jewellery at unbeatable prices. With a QP Jewellers discount code, you can save even more on their already competitive prices. Whether you’re looking for an engagement ring, a new pair of earrings or a special gift, QP Jewellers has something to suit every taste and budget. So why wait? Treat yourself or someone special today and save with a QP Jewellers discount code. Here at Groupon, we know that saving money is important to our customers. That’s why we work hard to find the best QP Jewellers discount codes and deals, so you can shop for your favourite products at prices that suit your budget. Whether you’re looking for a new piece of jewellery for yourself or a special gift for someone else, we can help you save with our QP Jewellers coupons and discounts. So why wait? Start shopping today and see how much you can save with a QP Jewellers coupon code. One of the top-performing QP Jewellers products is their ruby heart pendant necklaces. These beautiful necklaces are perfect for those who are looking for a classic and timeless piece of jewellery. It comes in different sizes to suit everyone’s needs. With a QP Jewellers coupon code, you can enjoy even greater savings on this beautiful item. So why wait? Treat yourself or someone special today by shopping at QP Jewellers.
teva listed on couponmatrix.ukTeva sandals had a humble start back in 1984, created out of an old flip flop and watch strap, but now they are loved by outdoor explorers everywhere. From the Grand Canyon to the rest of America, and now the world, Teva have had quite a journey, which is fitting for shoes that can take you on yours, no matter what it holds. Pick up a pair of shoes with your Teva discount code so you can get out without breaking the bank.