Foreign retail chains leave Turkey amid rise in competitiveness in local players
ISTANBUL - ReutersTurkish retail chain Beğendik, which bought 12 stores of Europe’s supermarket chain last year, plans to complete the acquisition of 10 Tesco Kipa stores in Turkey by the fourth quarter, as many foreign retail chains have left Turkey in recent years as they had difficulties competing with local players.
“While we had applied an organic growth strategy until last year, we have seen that we can grow faster with an inorganic method after we acquired a number of Real stores. In line with this new strategy, we’ll buy some 10 stores of Tesco Kipa. We’ll complete the acquisition by the fourth quarter,” said Beğendik CEO Hacı Beğendik.
He also said the company is in talks with foreign funds in the framework of the faster growth strategy.
Beğendik has 46 supermarkets across Turkey as well as 13 hypermarkets under the brand Real.
Tesco Kipa said the company was in talks for the sale of “some stores” to Beğendik and Real in a written statement last week without giving further details.
Beğendik said the 10 negotiated stores were in the capital city of Ankara, the southern province of Mersin and the Aegean province of Denizli, as “Tesco had already wanted to exit these locations.”
Tesco Kipa had 173 stores by the end of May, according to the last activity report, which was released on June 30.
The company completed the fiscal year between March 1, 2014, and Feb. 28, 2015, with 2.2 billion Turkish Liras in turnover and announced 574 million liras in loss. The company’s loss was 630 million liras in the previous year.
A number of foreign retail giants have decided to exit the Turkish market as they needed to run their operations in lower profits in the face of stronger local players than they see in similar markets.
While Real, owned by Germany’s Metro Group, sold a total of 12 stores to Beğendik last year, Spain’s Dia sold its subsidiary in Turkey, Diasa, to local Yıldız Holding in 2013.
France’s Carrefour sold some of its stakes in its Turkish subsidiary, Carrefoursa, to its local partner, Sabancı Holding, in 2013 after years of losses, becoming the minority stakeholder in the chain.
French electronic retailer Darty and Britain’s Electroworld also sold their stores to local Bimeks in Turkey.
American Best Buy also sold its stores in Turkey to local chain Teknosa.