ACHIEVING A 10 % INCREASE IN ITS OPERATING PROFIT AND 14 % INCREASE IN ITS TURNOVER IN THREE QUARTERS OF THE YEAR, MIGROS GROUP REVISES ITS TARGET OF OPENING 100 NEW STORES BY THE END OF THE YEAR AND INCREASES ITS TARGET TO 150 NEW STORES

22 November 2012

ACHIEVING A 10 % INCREASE IN ITS OPERATING PROFIT AND 14 % INCREASE IN ITS TURNOVER IN THREE QUARTERS OF THE YEAR, MIGROS GROUP REVISES ITS TARGET OF OPENING 100 NEW STORES BY THE END OF THE YEAR AND INCREASES ITS TARGET TO 150 NEW STORES

ÖZGÜR TORT, GENERAL MANAGER OF MIGROS GROUP:

“MIGROS STARTED LAST QUARTER OF ITS 58TH YEAR WITH DOUBLE DIGIT GROWING RATE"

Migros, leading modern retailer in Turkey, has increased its turnover by 14 % and operating profit by 10 % in 9 months of 2012 compared to the same period of the previous year. Özgür Tort, General Manager of Migros Ticaret A.Ş., emphasized Turkish retail market has increased to USD 400-500 billion volume pushing the employment and total economy to the higher ranks within the framework of Turkey's target of being in top 10 economies of the world in 100th Anniversary of the Republic. Tort stated: “2023 main targets of the country requires a vision in the retail sector. The way to have such a vision is possible through enlarging the aspects of the trade and going beyond the ordinary. Retail has the power to transform the production and associated sectors in line with increased income per capita and chain of values created.  Each new store means putting local products produced in any region of Turkey on the conveyor belt. As Migros, we are aware of our responsibility and we will fulfill the requirements of such a vision. Offering most ambitious prices in basic and fresh food in Turkey, Migros has improved its accessibility to the households as well as improving the accessibility of the households to the products. The tonnage of sales in respective products has increased three times. Using thematic sales campaigns, we extended high sales period to the year which used to be limited with the festival times in the past.  We created reasons for shopping. In return, we created additional demand amounting equal to the demands created in time of two festivals. As long as the customer creates new demand, it affects entire supply chain starting from the production and helps the economy growing."

Migros Group, one of the important players of food retail market, has realized 14 % increase in turnover and 10 % in operating profit by achieving double digit growth and profitability rates in first 9 months of 2012. Özgür Tort, General Manager of Migros Ticaret A.Ş., shared with the journalists the business results and targets as well as the future visions in retail sector during annual evaluation meeting of Migros Group. 

 

Tort says: “Last quarter starts with pleasing results; we will continue our double digit growth rate"

At the end of 2011, Migros Group informed that they would get closer to their customers in Turkey by offering rich diversity of products and striking prices with the brands of Migros, Tansaş, 5M and Macrocenter. Stating that Migros Group will have increased, together with the results of 2012, its turnover by 50 % in four years’ time covering 2008- 2012 period, Özgür Tort stated that the double digit growth rate trends continues according to the results in 9 months of 2012. Özgür Tort says: "As of the end of September, we have succeeded increasing our turnover by 14 % and operating profit by 10 % compared to the same period of last year. At the beginning of 2012, we targeted to return the turnover of ŞOK by increasing the growth through focusing on the supermarket.

The results obtained in 9 months of the year clearly indicate that we will be surpassing the turnover target of TL 6.4 billion by the end of 2012”. Underlying the importance of the profitability for sustainable growth in retail market as well as the increase in turnovers, Mr. Tort says: "It is equally important for us to maintain double digit growth rates in both sides."  

“We targeted 100 new stores and we have achieved it in early September. Therefore, the new target is 150 stores”

Explaining that Migros Ticaret A.Ş. reached to the consumers in 883 points in 69 provinces of Turkey and in abroad, Mr. Özgür Tort says: "We always stepped on the gas even during hardest crisis periods and continued our investments creating new locations to improve our penetration. At the end of 9 months of the year, we have achieved our year-end target of 100 new stores. Therefore, we have revised the year-end target and increased it to 150 new stores." Expressing that they have invested TL 170 million in 2012, Mr. Özgür Tort states that the gears of the economy turn to win in production, trade, employment and revenue and the State also wins when they are all registered. Mr. Özgür Tort continues saying: “As Migros, we always focus on adding value to our customer and to the structure of Migros. It can only be achieved through growing and expanding. We plan to increase the number of the stores to 890 by the end of the year. And we plan to exceed 1000 stores in 2013.” Stating that shopping develops over multiple choices in today's economic structure instead of the limitations, Mr. Özgür Tort continues saying "We believe the right of choice of the consumer and therefore, we have increased the options and increased the accessibility of the consumers by the getting closer."

“One fifth of the products in Migros cannot be counterfeited... Our unique "Only in Migros" products and fresh food is our distinctive side. We are the cheapest in Turkey in basic food segment such as yoghurt, granulated sugar, flour, oil and Migros has increased the access of the households to the supply and tripled the tonnage of food traded."

Expressing that twenty per cent (20 %) of the products offered to the choice of the consumers in Migros are Migros branded private label products which are produced exclusively for Migros and fresh food, Mr. Özgür Tort continues saying: “Such product groups called "Only in Migros" cannot be counterfeited at all. They are our unique products. Therefore, they constitute our most distinctive side. Our second focus is the richness in diversity and choices of the brands. We always act in due diligence in these two distinctive focus areas and our sensitivity for respective areas will continue also in the future period.” Mr. Özgür Tort emphasized that they have captured the admiration of the consumer with abundant choices, distinctive freshness and taste offered in meat, pastry, fish, vegetables and fruits in 12 months of the year and also states: “We have exerted additional effort together with the producers in basic food and fresh products which receive the highest demand".  We have achieved a real permanent decrease in our prices. I can easily state that we are the cheapest in Turkey in Migros and Tansaş branded yoghurt, granulated sugar, flour, oil, milk. Such prices increase accessibility of Migros Group to the households and we are pleased to observe that the households’ access to the supply has also increased in satisfactory manner.

The tonnage of sales in respective products has increased three times. Maintaining freshness of respective products and meeting daily logistic requirements focusing on the efficiency may only be possible with the Migros experience. GAP labeled products in fruit and vegetables and our own integrated plant make us distinctive. Fresh food is the most important element of daily shopping; therefore, good servicing and most economic daily prices improved our accessibility and approximate the customers from any income group. There is an increase in wallet shares even in most conservative income groups. We serve 250 million customers in a year."   

 

 

“Remember that each new store means putting local products produced in any region of Turkey on the conveyor belt. As Migros, we are continuing our journey on the path of rapid growth to make the biggest contribution to 2023 targets."

Reminding that Turkey intends to be one of the top 10 biggest economies in the world by the year 2023 which is 100th Anniversary of the Republic, Mr. Özgür Tort continues saying: “Within the framework of the target of being one of the top 10 biggest economies in the world by 2023, income per capita is supposed to be USD 25.000. According to target and considering 80 million population by 2023, we may talk about a USD 2 trillion GDP.  We know that retail market has volume of USD 200 billion with USD 10.400 income per capita and 74 million population in Turkey. Thus, we notice that 25 % of the income per capita returns to the retail sector. In Europe where the income per capita is as around USD 35-40 thousand, at least one fifth of the income per capita goes to the retail expenses. Return to the retail may be 22 % when the respective targets are achieved by the year 2023 with 80 millions population of the country. Thus, Turkish retail sector will be reaching tremendous volume in USD 400- 500 billion range. The critical question here is how we will succeed it… At this very point, we need to think about the vision of the retail sector which creates a locomotive effect in the economy. Being listed in rank 14 in world retail sector lists, Turkey's retail sector is several steps ahead of the country’s rank in GDP area. Retail converts the gross domestic product into the production with the chain of values created, into the access to the goods and services through trading as well as to the logistics, financing and technology fields. Thus, this cycle creates new employment and revenues. Therefore, retail industry is a locomotive in this critical period…” Claiming that the retail sector will undertake the role being most important locomotive for 2023 targets, Mr. Tort says: “As Migros, we will play our leader role for creating demand by adding value to the modern retail through our expansion and innovation activities in order to make biggest contribution for realizing 2023 targets in the country. Such growth must not be limited with various conservative approaches; instead, each retail representative needs to develop its own development policy either in modern channel or in international channel to create respective growth in the sector. To be at the upper positions in the world league may only be possible through developing infrastructure and distribution channels as well as improving the registered economy."

Özgür Tort continued his assessment on the impact of the development in retail sector to the general economy as follows: “Remember that each new store means putting local products produced in any region of Turkey on the conveyor belt.

Products passing from the conveyors find their new owners in the stores; they increase the access of the households to the products. Thus, it gives the production an opportunity for growing.

This cycle has positive effects to numerous sectors. However, most remarkable one is the contributing effect on the employment. Human factor employed turn into the income/ revenue. We create direct opportunity for employment for 18 thousand 500 people and we have also contribution the employment in a larger ring. When everything is registered, revenue and value created also constitutes source for the State and development of such structure will make a great contribution to the general national economy."

“In new period, the winner will not be the one who is responsive to the demand but the one who can create demand. We have created additional demand equaling to the times of two festivals through thematic shopping campaign."

Taking attention to the importance of "creating new demands" in order to achieve the growth targets in the new era, Mr. Özgür Tort states: "Being responsive to existing demand is surely important; however, creating additional demand is also equally important." Mr. Tort informed that Migros Ticaret A.Ş. increased the number of its customers in 9 months of the year mainly resulting from the new stores opened and he also emphasized that there is a significant increase also in number of the customers on store basis.   Stating that Migros Ticaret A.Ş. has provided a different direction to the demand in shopping in last 2 years by applying thematic shopping concepts and creating new reasons for shopping, Mr. Özgür Tort continues saying "The consumers were amazingly interested for our thematic periods. Just to make a comparison with the religious festival times where we make high tempo of sales, we have created additional demand equaling to at least total demand created in two festival times. Respective additional demand opened the courses of the products and provided the opportunity to make a difference together”. 

“We made a first with “Mobile Office” and our stores are not managed from the office but inside the store."

Stating that Migros Ticaret A.Ş. continues to inspire, encourage the retail sector with its innovations in the sector, Mr. Özgür Tort shared the details of new application "Mobile Office" with the journalists for the first time. “Being a first in Turkish and world retail sector, this implementation enables managing the stores inside the store itself instead of the back offices. Equipped with mobile reporting and management tools, this application enables the managers of Migros stores checking the stock status, the sales trends of particular products, which products are sold together through the reports opened in maximum three seconds on their table computers and they can get immediate, fast and effective solutions to any operation problem if any.  Stating that "Mobile  Office” application is used by all managers of Migros, Tansaş, Macrocenter and M-jet stores, Mr. Özgür Tort says "In near future, we target the service managers and the auditing teams using the application in an effective manner together with the new application of the tablet solutions." Tort states that they have achieved decrease in total time costs while they have achieved improvement in operational speed and communication with the customer in 5 months’ time after launching the application.  Tort says: “Innovation in Migros is the basic element in the identity of the brand and the enterprise. Mobile office is the first in the world and we have increased availability of the goods on the shelf in a year by 3 % with the contribution of this application. The number of printed reports has decreased by 40 % in the stores leading a decrease in operational costs.  It also helped us to increase the time spent for the customer.”