Variety Stores in Turkey

PROSPECTS

Specialist retailers contribute to decline

In 2019, despite having a competitive advantage in terms of pricing and offering an extensive product portfolio, variety stores lost ground to specialist retailers. This led to a decline in outlet numbers and an even stronger current value decline.

The growing popularity of e-commerce also drags down sales

Similarly, the increasing popularity of e-commerce and the growing number of online retailers that offer the same products as those offered by variety stores also negatively affected the overall performance of variety stores in 2019. More consumers are realising the convenience, low prices and wide product variety available via e-commerce.

Poor performance expected for variety stores in the forecast period

Due to the competition from specialist retailers and e-commerce, variety stores is expected to continue to struggle to achieve growth in the forecast period. The number of outlets is expected to continue to decline, and although a return to current value growth is expected, this is expected to be below the inflation rate; thus seeing an actual value decline from an already low base.

COMPETITIVE LANDSCAPE

Variety stores remains highly consolidated in value terms

In 2019, variety stores continued to be strongly dominated by one player in value terms, Tchibo Turkiye, with smaller players, included under “others”, only accounting for a single-digit value share. Tchibo was the only chained variety store in 2019, and offers an extensive product portfolio, including clothing and kitchenware.

Far greater fragmentation is seen in terms of outlet numbers

However, in terms of outlet numbers, variety stores is far more fragmented, with “others” accounting for most stores. These are mostly independent variety stores which specialise in homewares and other small construction and decoration items.

Small, unprofitable channel makes new entrants unlikely

Due to the small size of the variety stores channel and the little chance of profits, no major new player is expected to enter the channel in the forecast period. In fact, more players are expected to leave the market, with the number of outlets expected to continue to decline.

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