Consumer Foodservice in Turkey
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CONSUMER FOODSERVICE IN TURKEY Euromonitor International October 2014 CONSUMER FOODSERVICE I N T U R K E Y P a s s p o r t I LIST OF CONTENTS AND TABLES Executive Summary ..................................................................................................................... 1 Growth Continues Despite Unfavourable Developments .......................................................... 1 Localisation Drives New Product Development ........................................................................ 1 Chained Outlets Have Competitive Advantages Over Independents........................................ 1 the Most Dynamic Type of Location Is Retail ............................................................................ 1 Difficult Times Ahead ................................................................................................................ 2 Key Trends and Developments .................................................................................................... 2 the Effect of the Unstable Economic and Political Environment on Consumer Foodservice ..... 2 Young Urban Consumers Increase the Demand for Exotic and Healthy Food and Home Delivery ..................................................................................................................................... 3 Fast Food Operators and Premium Restaurants Benefit From the Shopping Mall Boom ......... 5 Consumer Foodservice Continues To Attract New Investments ............................................... 6 Premiumisation and Localisation on the Rise ........................................................................... 7 Operating Environment................................................................................................................. 8 Franchising ............................................................................................................................... 8 Eating Culture ............................................................................................................................... 9 Market Data ................................................................................................................................ 11 Table 1 Units, Transactions and Value Sales in Consumer Foodservice 2008- 2013 ........................................................................................................... 11 Table 2 Units, Transactions and Value Sales in Consumer Foodservice: % Growth 2008-2013 ..................................................................................... 11 Table 3 Consumer Foodservice by Independent vs Chained: Units/Outlets 2013 ........................................................................................................... 11 Table 4 Sales in Consumer Foodservice by Eat-in/Home Delivery/Takeaway/Drive-Through: % Foodservice Value 2013 ................ 12 Table 5 Sales in Consumer Foodservice by Food vs Drinks Split: % Foodservice Value 2013 ............................................................................ 12 Table 6 Sales in Consumer Foodservice by Location: % Foodservice Value 2008-2013 .................................................................................................. 12 Table 7 GBO Company Shares in Chained Consumer Foodservice: % Foodservice Value 2009-2013 ................................................................... 13 Table 8 GBN Brand Shares in Chained Consumer Foodservice: % Foodservice Value 2010-2013 ................................................................... 13 Table 9 GBN Brand Shares in Chained Consumer Foodservice: Units/Outlets 2013 ........................................................................................................... 14 Table 10 Forecast Units, Transactions and Value Sales in Consumer Foodservice 2013-2018 ............................................................................. 15 Table 11 Forecast Units, Transactions and Value Sales in Consumer Foodservice: % Growth 2013-2018 ............................................................ 15 Definitions ................................................................................................................................... 15 Sources ...................................................................................................................................... 16 Summary 1 Research Sources ...................................................................................... 16 © Euromonitor International CONSUMER FOODSERVICE I N T U R K E Y P a s s p o r t 1 CONSUMER FOODSERVICE IN TURKEY EXECUTIVE SUMMARY Growth Continues Despite Unfavourable Developments A number of political and economic difficulties in the second half of 2013, such as the Gezi Park demonstrations, criminal investigations regarding corruption and the depreciation of the Turkish lira, affected consumer foodservice. However, current value growth of 3% was recorded in 2013, thanks to the continued opening of chained stores, especially within fast food, 100% home delivery/takeaway and specialist coffee shops. Chained 100% home delivery/takeaway recorded the most dynamic growth, due to the increasing number of outlets, promotions and demographic changes. Localisation Drives New Product Development A localisation strategy, such as using local flavours, frequently started to be used by international operators in order to compete with local competitors over the review period. Specialist coffee shops started to serve Turkish coffee, whilst the use of traditional meat products such as sucuk and pastirma in new products increased. Moreover, an increasing number of fast food outlets started declaring their usage of halal food, in compliance with Islamic standards, certified by the Turkish Standards Institution (TSE). This also helped to drive the growth of fast food. Chained Outlets Have Competitive Advantages Over Independents Independent players continued to account for the vast majority of outlets in consumer foodservice in 2013, due to the high number of independent local cafés/bars and Middle Eastern full-service restaurants. However, chained companies grew faster than independents, as they have more financial power to open new outlets and offer attractive menus and promotions. Moreover, chained stores are able to react to threats and opportunities faster than independent outlets. In 2013 the leading chained operators remained TAB Gida San ve Ticaret, the owner of Burger King, Sbarro, Popeye‟s and Arby‟s, followed by Anadolu Endüstri Holding, which owns McDonald‟s. the Most Dynamic Type of Location Is Retail Although stand-alone was the leading type of location in 2013, with a 66% outlet share, retail witnessed the most dynamic growth in terms of outlet numbers in 2013, due to the rapid increase in the number of shopping centres, where a rising number of foodservice outlets are located. Shopping centres offer a large number of fast food outlets, cafés/bars and self-service cafeterias. Leading fast food brands such as Burger King, Sbarro, Popeye‟s, Arby‟s and Köfteci Ramiz, and the leading company in pizza full-service restaurants, Pizza Pizza, were active in opening outlets in retail locations over the review period. In addition, many chained full-service restaurants, such as Big Chefs, Midpoint and Kitchenette, are based in shopping centres. © Euromonitor International CONSUMER FOODSERVICE I N T U R K E Y P a s s p o r t 2 Difficult Times Ahead Consumer foodservice is expected to see a negative value CAGR of 2% over the forecast period at constant 2013 prices, due to the decline expected for independent restaurants. Wages are expected to be stagnant, whilst the cost of living is rising, reducing consumers‟ purchasing power over the forecast period. However, despite expectations of recession at the beginning of the forecast period, chained restaurants are expected to continue to grow, as they will maintain strong promotional strategies, as well as introducing new concepts. Some investors may wait until the end of local elections scheduled for March 2014, followed by the general elections in 2015. Consumers are expected to move away from formal dining to casual low-cost options, which have become an affordable treat. KEY TRENDS AND DEVELOPMENTS the Effect of the Unstable Economic and Political Environment on Consumer Foodservice Despite healthy growth in the first half of the review period, Turkey had a number of political and economic difficulties in the second half of 2013, affecting trends in consumer foodservice. In May 2013, Gezi Park, an urban park located near Istanbul‟s bustling Taksim Square, was threatened by urban development plans. Intervention by the police with protestors may cause potential investors to question their commitments in the region. The main food and beverage destinations, such as Taksim, Besiktas and Kadikoy, were negatively affected by the demonstrations, as a large number of people hesitated to go out at night. The consequences of the demonstrations lasted for more than three months, causing a negative global image for Turkey, which reduced tourism in the second half of 2013. The 2013 corruption scandal in Turkey, referring to an ongoing criminal investigation which involves several key members of the ruling Justice and Development Party, also affected several markets, including consumer foodservice. Anti-corruption demonstrations once again negatively affected tourism in the second half of 2013. According to trade sources, an important part of food and beverage consumption in