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:

bershka listed on couponmatrix.ukbistrot-pierre listed on couponmatrix.ukgiffgaff listed on couponmatrix.ukmistral-online listed on couponmatrix.uksecret-escapes listed on couponmatrix.ukthe-nue-co listed on couponmatrix.uk
bershka listed on couponmatrix.ukBershka should be on the radar of every fashion-loving guy or girl. This brand brings together the latest looks with unique designs that are bound to boost your everyday style. Shop the range for less with a handy Bershka discount code from us - it’s easy to nail a casual cool look with these gorgeous collections. Bershka is all about fresh, fun style that’s both effortless and chic - check out the range today to discover a look that’s uniquely you.
bistrot-pierre listed on couponmatrix.ukIndulge in fine French food without busting your budget, and enjoy a taste of the continent at the charming Bistrot Pierre. Drop into your nearest restaurant with one of our money-saving Bistrot Pierre offers in hand, and you could tuck into a breakfast of champions or a romantic dinner for two while keeping your bank balance intact. From beef braised in red wine to delectable vegetarian tartlets, there’s something for all tastes at your local Bistrot Pierre.
giffgaff listed on couponmatrix.ukTake control of your mobile usage and do away with monthly contracts - with giffgaff, monthly packages are made simple with goodybags starting from £6. Offering top value on mobile plans for people of all budgets, be sure to bag a bargain with a giffgaff voucher and cut the cost of your next set of minutes and data. A welcome break from the costly payments of big-brand networks thanks to their popular goodybag bundles, giffgaff is the perfect provider for those who like to keep in control of their phone usage.
mistral-online listed on couponmatrix.ukFor lifestyle clothing that exudes endless charm, take a trip to Mistral Online. As a bastion of fun and funky fashion, you can express your true self with a wardrobe that speaks volumes. Cool, comfy and above all unique, any thread from the Mistral Online selection can be made yours for less with the latest Mistral Online discount code. So go wild and shop dresses, tunics, skirts, tops, socks, scarves and more with the help of our offers at Groupon. At Groupon, we know that saving money is important to our customers. That's why we work hard to find the best deals and discounts on all your favourite fashion lines. Whether you're looking for a new wardrobe or just some new accessories, we can help you fill you find fashion solutions that will be a timeless addition to any clothing collection. We can help you cut the cost of any element of your attire, so get going and bag a bargain today. For that dash of timeless originality, look no further than Mistral Online dresses. With everything from fun floral arrangements, to night skies and artistic shapes featuring across the catalogue, you’re bound to find your next wardrobe staples and get it at a great price with our Mistral Online voucher codes. Someone seeking something alternative will find a lovely array of jumpsuits dungaree-inspired styles, all available in a beautiful array of colours.
secret-escapes listed on couponmatrix.ukLuxury travel isn't a world away with Secret Escapes. The not-so-secret travel company snaps up empty hotel rooms in bulk, passing on savings to customers with discounts of up to 70% available - and that’s before our Secret Escapes vouchers lower the cost even more. Experience fabulous beach vacations, city breaks, gastronomic tours, cultural treasures and luxury spas in top destinations at ridiculously low prices - and forget having to go on an ‘ordinary’ holiday ever again
the-nue-co listed on couponmatrix.ukThe Nue Co is a health supplement brand with a difference. From sleep drops to prebiotic and probiotic supplements, The Nue Co can help you transform aspects of your life and tackle sleepless nights and stresses sustainably. Shopping at this brand is guilt-free, too, thanks to its plastic-neutral and carbon-negative credentials. You can save money on the range of ingestible vitamins, fragrances and even topically-applied products with The Nue Co discount codes from Groupon. Keep our page bookmarked for the latest ways to save!