This year, winter products were placed in the showcases months ago. In the sector, where expatriates and foreign tourists show great interest, price sensitivity has increased on the domestic consumer side. The concern that ‘prices will rise again’ in the products that took their place on the shelves with a price difference of 30-40 percent compared to the previous winter, caused them to be sold scrambling.
Kiğılı, one of the sector players, stated that the shift between segments has intensified due to increasing prices, according to the news of Yener Karadeniz from the World, and that there has been a shift in demand from the luxury segment to their own categories. Noting that Orka Holding has already consumed 40 percent of winter products, it warned that there may be a supply shortage in the coming period. LC Waikiki, on the other hand, stated that due to the increasing price sensitivity on the consumer side, they put on the agenda to increase the supply from countries such as Bangladesh and Vietnam. On the other hand, all sector representatives stated that price increases will be more frequent and at lower rates in the coming period.
‘INCREASE WILL BE MORE FREQUENCY’
As it is known, according to the latest data for August, consumer inflation for August was 80.21 percent and producer inflation was 143.75 percent. In clothing, which had a weight of 6.42 percent in the inflation basket, consumer inflation exceeded 38 percent. United Marks Association (BMD) President Sinan Öncel stated that the price increases in the coming period will be determinant in which direction the costs, especially energy, will move. Predecessor, “Energy has become a very important cost factor in all stages of the manufacturing process. The uncertainty here will have a significant impact on price increases. Even if a special agreement is made between Turkey and Russia, we foresee increases in the raw material prices we will purchase from other regions. This started to reflect on the prices.” said.
Noting that this situation will inevitably be reflected in the prices of the final products, Öncel continued as follows:
“Price sensitivity has increased. In the next period, instead of high and intermittent price increases as in the past, there will be more frequent and low rate increases. There will be label changing teams in clothing stores, as has happened in the markets in the past months. The ready-to-wear garments are going for a gradual increase instead of a high-rate price increase all at once. It also makes discounts on products that don’t fit right away.”
‘SUPPLY STRUCTURES MAY EXPERIENCE’
Another issue discussed in the sector is that there will be a problem with the supply of winter products in the upcoming period. Prior, in this regard, “Although sales in the domestic market have largely followed suit, there are still deferred employees. This causes brands and manufacturers to prefer abroad. In this way, they are protected from exchange rate risk. For this reason, brands may experience difficulties in producing winter products. This is also reflected in the retail trade. We also talk about the weight of tourist expenditure. For this reason, there may be a problem in the supply of winter products in the country in the coming period. used the phrases.
The data of Istanbul Ready-to-Wear and Apparel Exporters’ Association supports this situation. According to the information on the website of the association, the number of exporters registered to the union was 19 thousand 148 at the beginning of this year, while this figure has already increased to 20 thousand 352.
‘LC WAIKIKI CONSIDERS SHIPPING SUPPLY TO ASIA’
LC Waikiki, Turkey’s largest retailer and the EU’s 6th largest retailer, is one of the brands that opened the winter season early this year. Vahap Küçük, Chairman of the Board of Directors of the brand, explained that they put winter products on the shelves earlier than in previous years, before expatriates and foreign tourists return to their hometowns.
Noting that there has been an important activity in this area with school shopping, Küçük said, “However, customers are trying to get used to winter product prices. There is a significant price difference compared to last year due to factors such as the increase in raw materials due to foreign exchange and energy costs. Customers are trying to get used to the prices. However, the density continues in tourism regions. The rate of foreign shopping, which was in the 15’s, has already risen to over 20 percent on average.” said. Stating that the price sensitivity caused by the small, decreasing purchasing power is the issue that puts them the most difficult, “We are thinking about how we can bring the prices back to affordable places. At this point, alternatives such as shifting production come to the fore. We are now trying to produce policy. It doesn’t work for domestic production, but the competition forces us. We are evaluating options such as making production in Asian countries and shifting some of the order there. Countries such as Bangladesh, Egypt, Uzbekistan and India offer more accessible prices for raw materials. Our competitiveness is adversely affected when you buy from an expensive place while your competitors are supplying from there.” used the phrases.
40 PERCENT OF WINTERS ARE FINISHED AT DAMAT
Orka Holding, which has Damat Tween and D’S Damat brands, put the winter coats on the shelves in June this year, which took their place in the showcases in August.
Süleyman Orakçıoğlu, Chairman of the Board of Orka Holding, “In addition to tourism, the rapid turn of the seasons was also effective in this situation. In addition to this, we observe that Turks living abroad are doing intensive shopping in Anatolia this year. Istanbul and its metropolitan cities attract tourists from all over the world. The rate of foreign shopping increased to 35 percent” said. Saying that there is a problem in production all over the world, Orakçıoğlu said about price differences, “Producer inflation is 143 percent. We cannot reflect this on prices all at once. There will be more frequent and lower rate price increases. For example, the last energy hike was not reflected in prices.” said.
Noting that the demand for winter products is also high, Orakçıoğlu continued as follows:
“We arrived in September, but we sold 40 percent of our projection for the autumn/winter collection. In December, we will put the spring and summer products on the shelves. The world is like that, and now we adapt to it.”
CONSUMER CHANGED SEGMENT IN SHOPPING
Kiğılı Chairman of the Board Hilal Suerdem said that this year, due to the density of both expatriate and foreign tourists, winter products took their place in the showcases in their stores as of July. Suerdem said, “We evaluated the tourist impact and saw the significant benefit of foreigners choosing us in terms of both price and quality. We tried to keep price increases as low as possible. It did not increase by half of inflation. In addition, thanks to this, there has been a shift towards us from top segment brands in the last period. They are satisfied with both the products and the prices. We also offer opportunities with our campaigns and outlet stores in order not to lose existing customers to a lower segment.”
At this point, drawing attention to the importance of correct planning and strategy, Suerdem continued as follows:
“Awareness in the international market has also been an important factor in the preference of foreigners. On the other hand, it has become difficult to find products lately. The fact that the EU preferred us in production put brands in trouble. Companies that were well organized and managed their suppliers well were not challenged. We are one of them. We have supported our suppliers even in the time of the pandemic. Now they support us. We are able to produce products for both export and domestic market on time.”
Noting that winter sales are already leading, Suerdem said, “In fashion retail, the one who buys the beautiful, stylish product early wins. We do not think that there will be price increases that will affect the purchasing power in the following period. The discount period is already approaching” made its assessment.