Five things we learnt about Turkey’s leading discounters

Date : 20 February 2019

We visited three of Turkey’s leading discounters, BIM, A101, and Sok, to understand what is driving their above market growth. In this article we highlight five strategies driving their growth and helping them to attract shoppers and grow their market share.

1. Growth strategy driven by store expansion

The discounters are growing faster than the market. This is due to the high number of store openings they are undertaking, over 500 annually. The retailers continue to open multiple stores near each other and in densely populated areas. A101’s key aim was to be Turkey’s largest retailer by store numbers, which it achieved in 2016. It currently operates over 8,000 stores.

Source: A101

2. Discounters increasing private label share

The three discounters report that between 45% and 70% of their sales come from private label. All three plan to increase this share further. Turkey’s current macroeconomic climate is inflationary, and shoppers’ disposable incomes are shrinking. As a result, shoppers are expected to increasingly opt for private labels. Discounters are amongst the best positioned retailers to keep their prices relatively low, by offering more of their own brands and using their strong market position to negotiate lower prices.

3. BIM and A101 maximising shelf space

BIM and A101 use every space available to stock products. This sometimes leads to them grouping, sometimes unrelated, categories alongside each other or within the same aisle or bay. Sok is an exception, as it is investing in simplifying the shopping experience through the roll out of improved store layouts and ranging.

Source: BIM, Sok

4. Fresh food strategy differs between discounters

Each retailer’s fresh food offer varies in look, feel and ranging. Sok offers shoppers alternative displays of fruits and vegetables, which are well stocked and maintained. It invests in the range to build a perception of higher quality in the category, to drive footfall and shopper loyalty.

Source: IGD Research

5. Online channel and small formats to reach more shoppers

A101 launched an online store in October 2018, with orders fulfilled by all stores nationwide. Sok also entered the online channel, but with a Click & Collect service, Cepte Sok. This service was launched in July 2017 and the retailer plans to expand the service to all its stores in the future.

It also acquired around 500 UCZ Magazacilik stores in Istanbul in December 2017. In 2018 these stores were converted to a hybrid convenience/discount format, under the Sok Mini brand. These help Sok increase its presence in the capital city and bring its stores closer to shoppers.

Source: A101, Sok

Subscribers can get more detail on this topic in our Discounters in Turkey presentation.