Forty-five percent of retailers expect sales to increase

ANKARA - In July 2014, TEPE increased month-on-month but decreased year-on-year. All retail subsectors weakened year-on-year whereas indicators and some expectations strengthened month-on-month with Ramadan and Festival effects. As a result, TEPE broke the downwards cycle after 3 months of decline. Retail confidence in the EU-28 declined month-on-month.

TEPE which has been declining since April demonstrated a slight upwards move in July. With a value of -7.6, TEPE increased month-on-month by 3.4 points but decreased year-on-year by 7.7 points. The year-on-year decline was driven by the weakening of business activities compared to past 3 months and of the expectations for sales in the next 3 months. The month-on-month increase was stimulated by the surge in business activities compared to past 3 months and of the expectations for sales in the next 3 months.

In July 2014 45 percent of TEPE survey participants declared that they expected business activities to improve in the next 3 months while 22.2 percent expect business activities to decline. 32.8 percent of the participants do not expect business activities.

Sales expectations surged in July after a 7-month stagnation. The balance value of the expectations for the next three months was 17.4 points. Sales expectations for the next 3 months declined year-on-year by 8.3 points and increased month-on-month by 5.1 points.

In July 2014, 18.8 percent of TEPE survey participants declared an improvement in their business activities compared to the year before while 57.2 percent declared deterioration. 24.1 percent of the participants declared that business activities did not change compared to July 2013.

The balance value of the volume of business activities in July 2014 compared to the same period in the previous year was minus 46.5 points, showing increase for the first time since December 2013. The level of business activities compared to the previous year therefore increased by 7 points compared to June 2014 and declined by 22.1 points compared to July 2013.

All retail sub-sectors declined year-on-year in July 2014. The decline was less than the average in the food, beverages, and tobacco products, textiles, ready-made clothing, and footwear,  furniture, lighting equipment and household articles, and “others” (gas station, pharmacy, perfumery, hardware, glassware, stationery etc) sector. It was above the average in the motor vehicles, non-specialized stores sectors, and the electrical appliances, radio, and televisions sector sectors with the last one demonstrating the sharpest decline.

Question-based assessment of the TEPE survey results indicates that compared to June 2014, all expectations and conditions deteriorated except the expectations for sales prices and employment in the next 3 months. Compared to July 2013, all indicators weakened except the expectations for sales prices in the next 3 months. The retail sector improved month-on-month but weakened year-on-year.

The EU-28 Retail Confidence Index had a value of 2 in July 2014, demonstrating a month-on-month decline by 1 point and a year-on-year improvement by 8.9 points. Compared to the EU-28 and the Eurozone, Turkey performed worse concerning year-on-year change, and better concerning month-on-month change. Turkey was one of the three countries that had the sharpest decline in retail confidence across the EU-28.

Greece had the highest year-on-year improvement in retail confidence in July. Greece was followed by Italy, Sweden, Southern Cyprus, and Spain. The highest month-on-month increase was in Slovenia and Romania. The EU-28 was outperformed by Eurozone compared in terms of both year-on-year and month-on-month change in retail confidence.

Konya’s retail confidence index up month-on-month and year-on-year

In the context of the Konya Province Retail Confidence Index (KOPE) carried out in cooperation by Konya Chamber of Commerce (KTO) and the Economic Policy Research Foundation of Turkey (TEPAV), face-to-face interviews with 300 retailers from Konya have been carried out on a monthly basis since February 2012.

In July, KOPE had a value of 6 compared to TEPE at -5.2. Konya’s retail sector which remained in the negatives since November moved up to the positives in June and maintained the upwards trend in July. KOPE improved year-on-year by 7 points compared to TEPE that declined by 7.6 points. KOPE also improved month-on-month by 3.7 points. Konya’s retail sector performed better than overall Turkey and the EU-28. The improvement was driven by the increase in business activities compared to past 3 months.

The anticipation for business recovery increased year-on-year while the expectations for orders, sales, employment and the number of stores declined year-on-year.