Prices of certain goods on market shelves in Turkey have been lowered by up to 30%, a figure that could reach 40% within one month, according to an executive of the country’s federation of retailers.
The prices of a range of items have started to reduce after retailers were urged to do so following a rebound in the Turkish lira, prompted by the government’s move to cover foreign exchange losses on certain deposits.
Several companies, including supermarket chains such as CarrefourSA, Migros, Şok Marketler and BIM this week said they would cut prices of certain goods by 10% to 30%, including milk, sunflower seed oil, cheese, fruits, vegetables and toilet paper. Elsewhere, furniture makers and carmakers have also pledged to lower prices.
“The price of products on shelves in grocery stores have fallen by 20%-30% at the initial stage. We are predicting that prices will go down by 40% in one month's time, and I would also argue that they will go down further,” said Turkey Retailers Federation (TPF) Vice Chairperson Ali Kaya.
“The prices have now gone down by close to 30% and will continue to go down,” Kaya noted, referring in particular to basic food items and cleaning products.
Companies and sellers had continuously hiked prices in recent months, driven mainly by a depreciation in the lira, while inflation jumped to 21.3% in November. It is expected to have exceeded 30% in December, breaching the level for the first time since 2003, according to surveys.
Prices quickly reflect any fluctuations but tend to usually be slower when it comes to downward movements.
Yet, the government and consumer groups have urged companies to lower their prices at the same pace they increased.
The calls came after the lira surged around 50% last week after President Recep Tayyip Erdoğan unveiled a scheme for savers to protect lira deposits against currency volatility, under which the Treasury and the Central Bank of the Republic of Turkey (CBRT) would reimburse losses on converted lira deposits against foreign currencies.
Kaya said meetings were held with federation members and market owners to evaluate the recent developments.
“At the moment, many of the local grocery stores have already lowered prices. We are also pushing the factories on this issue,” he told Anadolu Agency (AA).
“This creates a chain reaction. Competition occurs when one grocery store makes a discount. When one cuts the price of sunflower seed oil, the other starts lowering it as well. This chain makes all the grocery stores in Turkey reduce (prices) otherwise they are losing customers,” he explained.
“If the exchange rate continues like this for a month, they (prices) will go down another 40%. This includes basic food and cleaning,” he added.
