A recent survey by the United Brands Association (BMD), which represents 518 non-food retail brands, has revealed that 64% of its member brands—or two out of every three—are currently involved in legal disputes with their landlords over rent issues.
BMD President Sinan Öncel emphasized that rent is one of the most significant expense items for retail brands. He noted that in lease agreements that have reached their 10-year renewal mark, some landlords are demanding rent increases of up to 600%.
“In our May survey, we measured the extent of rental conflicts between our members and landlords. Although our members have applied annual rent increases in line with the legal average inflation (CPI), 64% of them reported being in court with their landlords,” said Öncel.
He called for a review of a 2012 amendment to the Turkish Code of Obligations, which grants landlords the right to terminate contracts without reason after 10 years, stating that this regulation needs urgent revision.
“We have repeatedly conveyed our concerns to the Ministry of Treasury and Finance. Unless this regulation is updated, excessive rent hikes will continue to harm both retail trade and the country’s efforts to combat inflation,” he added.
Mother’s Day and Discounts Boost Retail in May
Commenting on the performance of branded retail in May, Sinan Öncel stated that promotional campaigns and Mother’s Day gift shopping helped significantly boost both sales volumes and revenue.
According to BMD’s monthly survey:
- 86% of member brands reported an increase in item sales compared to April.
- 91% saw a rise in total revenue.
Category-wise performance:
- 100% of footwear and cosmetics brands saw growth in item sales.
- 90% of apparel brands and 67% of food service brands also reported sales increases.
This trend aligns with Central Bank credit card data, which shows:
- A 43.7% increase in card spending for clothing and footwear, reaching ₺142.9 billion.
- A 39.3% rise in health and cosmetics, totaling ₺78.3 billion.
- A 29.9% increase in food service, reaching ₺124.7 billion.
Transaction volumes also grew:
- 37.5% in clothing and footwear,
- 32.1% in health and cosmetics,
- 36.1% in food service.
However, Öncel cautioned that this growth may come at a cost:
“Many brands, struggling with high interest rates and limited access to financing, are sacrificing profitability to maintain cash flow by relying on discount campaigns. This is not a sustainable strategy. We must urgently implement policies that will restore retail trade to its normal rhythm,” he concluded.
Source: Patronlar Dünyası/ Prepared by: İlayda Gök