Full-Service Restaurants in Turkey

PROSPECTS

The increase in incoming tourists boosts sales

In 2019, the number of incoming tourists continued to increase in Turkey, along with the alleviation of security risks and the exchange rate value depreciation of the Turkish lira against foreign currencies, which increased the appeal of Turkey as a destination for European tourists. This trend had a significant positive impact on the current value performance of full-service restaurants and compensated for the loss of demand amongst local consumers.

Macroeconomic situation leads to outlet decline and a redistribution of consumers

In 2019, intensifying macroeconomic deterioration in the form of rising food prices, the exchange rate value depreciation of the Turkish lira against foreign currencies and rising interest rates inflicted significant downwards pressure on the profit margins of operators of full-service restaurants. Moreover, the operational costs of outlets also increased due to rising rents, which also hindered growth in the number of outlets.

Home delivery continues to gain share from eat-in

Eat-in, whilst remaining by far the leading format in full-service restaurants, continued to lose share to home delivery in full-service restaurants in 2019. The main reasons behind the increase in home delivery were increasing company investment and changing consumer preferences.

COMPETITIVE LANDSCAPE

LGE Gida Turizm Tic leads due to high consumer awareness and innovation

In 2019, the competitive landscape in full-service restaurants remained highly fragmented. Nevertheless, LGE Gida Turizm Tic continued to lead in value terms with its Big Chefs brand.

Change of ownership for Pizza Pizza, which becomes Terra Pizza

Luz Business Opportunities SARL of Luxembourg, owned by Mediterra Capital, a leading private equity firm in Turkey, acquired Pizza Pizza, which was the third largest full-service restaurants brand in Turkey in 2019. Pizza Pizza outlets have started to undergo rebranding, being renamed Terra Pizza, with the brand image seeing a gradual changeover.

The leading companies combine international and local tastes

Turkish consumers’ palates are rather conservative, and grounded in local tastes. As a consequence, the leading companies within full-service restaurants, especially those operating within pizza and European full-service restaurants, combine familiar local and international tastes.

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