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:

clink-hostels listed on couponmatrix.ukcrocs listed on couponmatrix.ukla-roche-posay listed on couponmatrix.ukmusicroom-com listed on couponmatrix.uksubway listed on couponmatrix.ukyoins listed on couponmatrix.uk
clink-hostels listed on couponmatrix.ukSituated in the heart of London and Amsterdam, Clink Hostels is perfect when you need somewhere to crash after a night of partying or a quiet place to rest your head after a long day of sightseeing. Explore the urban jungle for less with the discounts available at this affordable hostel chain, including early bird savings, 30% off 7+ night stays and free breakfast. Complete your booking with a Clink Hostels voucher code from Groupon and you’ll find yourself with even more cash to power your adventures. Whether it’s a percentage off your total stay, a free night’s stay or complimentary breakfast, we’ll help you get the best deal possible with our Clink Hostels discount codes. At Groupon, we’re always refreshing our page with new deals, so be sure to check here before placing your Clink Hostels booking – you can save 25% on bookings made more than 30 days in advance, and there’s a 15% youth discount to make your travels as cheap as possible. Place your Clink Hostels booking as far in advance as possible to get the best price, and don’t forget to check if you’re eligible for the youth discount or the free breakfast. We’ve got the scoop on all the best Clink Hostels promo codes available now, so you’ll never miss out on a great deal if you keep our page bookmarked. Travelling around Europe doesn’t have to cost the earth if you let Groupon help you out!
crocs listed on couponmatrix.ukSince giving the human foot some sole in 2002, Crocs has used the galosh-inspired design as a springboard from which to move into the world of sneakers, boots, high heels and wedges. So with your choice of style made, be sure to grab a Crocs discount code for extra savings.
la-roche-posay listed on couponmatrix.ukFrench skincare brand La Roche Posay is the number one brand recommended by UK dermatologists, so if you’re searching for skincare products with street cred – this is it! From soothing serums to powerful UVA protection, La Roche Rosay has every part of your routine covered. Whether you have dry or oily skin or struggle with acne, fine lines or both, choose high-performance skincare products using your La Roche Rosay discount code. With the skin analyser tool, you can build your dream routine with recommendations tailored to your skin.
musicroom-com listed on couponmatrix.ukMusicroom are a one-stop shop for everything an aspiring or professional musician could possibly want. Whether it's instruments, accessories or educational resources, it's all available under one roof - and with the Musicroom discount code it's all going for a song. Their huge music database contains over 300,000 sheet music titles, and you can even get hold of exam past papers to make sure you sail through that all-important entry audition that could make or break your career.
subway listed on couponmatrix.ukWhen hunger comes a calling, there’s no better than a cure than a big tasty sandwich from Subway. With more than 50 years since it first set up shop, Subway has earned itself a reputation as one of the world’s favourite fast food restaurants, so pick up one of our Subway vouchers and tuck into your Sub for less. Whether you prefer a meatball marinara or an Italian B.M.T., Subway has something for everyone.
yoins listed on couponmatrix.ukAre you looking to revamp your wardrobe in the latest styles without using up all your savings? Then look no further than Yoins who have the lowdown on cutting edge fashion for your pleasure! With a Yoins discount code on us you’ll be dying to get your hands on these dresses, sweaters, shoes and more. Check out the ‘New In’ section to see what’s fresh off the runway or the sale to see what you can get for less.