As if the internal vulnerabilities of the Turkish economy were not enough, rising global energy prices exacerbate the problems. As Turkey moves towards the elections in 2023, all economic indicators and all hearsays from sectors show that this winter will be very difficult.
United Brands Association (BMD) President Sinan Öncel stated that the pressure caused by high input costs, especially raw materials, energy, distribution and labor, continues in the sector. Underlining that the increase in turnover in the retail sector continued in June with the effect of tourists, Öncel stated that the turnover of BMD member brands increased by an average of 80 percent compared to the previous year. Noting that there are companies that have achieved a turnover increase of 100 percent or more, but this increase in turnover is not fully reflected in the units, Öncel said, “Many of our brands have difficulties in catching up with the 2019 figures in unit sales. The growth in turnover is not due to the quantity, but to the price increases. With a relaxation in raw material prices, However, the cost pressure on other inputs continues.”
“WINTER SEASON WILL BE TOUGH”
Öncel, pointing out that there is a 60-point difference between Producer Price Index (PPI) and Consumer Price Index (CPI) according to June data, “Firms will have to reflect these costs on prices in the coming months. Price increases of up to 100 percent on an annual basis in winter season products will not be surprising,” he added.
Pointing out that the consumer's expectation is that price increases will continue, Öncel continued as follows: “For this reason, those who have the opportunity bring their needs shopping to the fore. Therefore, although the desired level cannot be reached in unit sales, the activity in the retail sector continues. We anticipate that this activity will continue throughout the summer season with the contribution of tourists. Although it is too early to make a prediction for the period after October, we can say that the winter season will be difficult for both the industry and the consumer.”