Retail Sector Recovers Month-On-Month TEPE increased month-on-month by 3.9 points but decreased year-on-year by 1.2 points.

ANKARA - In August 2014, TEPE increased month-on-month by 3.9 points but decreased year-on-year by 12 points. The largest year-on-year surge in sub-sectors was in motor vehicles sector. The volume of business activities compared to past period increased month-on-month. The retail confidence in the EU is down.

TEPE which started an upwards movement thanks to the Ramadan and festival maintained the upwards trend, with a value of minus 2.9. TEPE increased month-on-month by 3.9 points but decreased year-on-year by 1.2 points. The year-on-year decline was driven by the decrease in the volume of business activities compared to the past 3 months.

In August, sales expectations maintained the surge in July. The balance value of the expectations for the next three months was 19.2 points. Sales expectations for the next 3 months declined year-on-year by 0.9 points and increased month-on-month by 1.9 points. In August 2014, 49.8 percent of TEPE survey participants declared that they expected business activities to improve in the next 3 months while 20.6 percent expect business activities to decline. 29.6 percent of the participants do not expect business activities.

The balance value of the volume of business activities compared to the same month in the year before, which increased in July, had a value of -30.4 in August 2014. Business volume compared to the year before increased by 7 points compared to July 2014 but decreased by 4.2 points compared to August 2013. In August 2014, 22.1 percent of TEPE survey participants declared an improvement in their business activities compared to the year before while 46.6 percent declared deterioration. 31.4 percent of the participants declared that business activities did not change compared to August 2013.

The best performer of the month among sub-sectors was motor vehicles sector. Food, beverages, and tobacco products; electrical appliances, radio, and televisions sector; and the “others” (gas station, pharmacy, perfumery, hardware, glassware, stationery etc) improved above the average. Furniture, lighting equipment and household articles sector declined year-on-year but at a rate lower than the average. Textiles, ready-made clothing, and footwear; and non-specialized stores sectors declined more than the average. The sharpest decline in August was in the textiles, ready-made clothing, and footwear sector

Question-based assessment of the TEPE survey results demonstrate that compared to July 2014, all expectations and conditions deteriorated except the expectations for sales prices in the next 3 months. Compared to August 2013, expectations for sales prices in the next three months and for the number of stores in the next year were the only indicators that improved. Retail sector performed better than July 2014 but worse than August 2013.

The EU-28 Retail Confidence Index had a value of 1 in August 2014, demonstrating a month-on-month decline by 1.2 points and a year-on-year increase by 3.5 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 seven EU-28 countries that faced the sharpest year-on-year drop in retail confidence.

Greece had the highest year-on-year improvement also in August. The country was followed by Hungary, Southern Cyprus, and Spain. France, Turkey, Denmark, Austria, the United Kingdom, Bulgaria, and Croatia faced year-on-year decline in retail confidence. The highest month-on-month improvement was in Finland. The EU-28 Retail Confidence index was weaker than the Eurozone index both year-on-year and month-on-month.

Anticipation for recovery up, expectations down in Konya’s retail sector

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 August, TEPE had a value of 2.7 compared to KOPE at 5.6. Having maintained positive values since June 2014, Konya’s retail sector remained in the positives in August despite a slight decline. Year-on-year, KOPE declined by 0.4 points while TEPE declined by 0.5 points. Month-on-month, KOPE declined by 0.4 points. Konya’s retail sector had a higher value than the EU-28 Index and overall TEPE index. The decline was driven by the weak expectations for sales in the next 3 months.

The anticipation for business recovery increased both month-on-month and year-on-year; expectations for sales and orders placed with suppliers declined on both terms.