Consumer demand for electronic goods drive retail sales

ISTANBUL

The annual increase in retail sales accelerated again in January after hitting a five-month low in December, driven mainly by demand for consumer electronics and home appliances.

Retail sales grew by 12.5 percent in the first month of 2025, while the monthly increase quickened from 0.8 percent in December to 2 percent.

What drove retail sales in January was home appliances and furniture. Despite the holiday shopping and campaigns companies offered in December, sales of electrical appliances increased by 2.7 percent. In January, the growth in sales surpassed that figure, rising by 4.5 percent and marking the highest increase in the past year.

On an annual basis, sales surged 7.6 percent in that category, data from the data from the Turkish Statistical Institute (TÜİK) revealed.

Another category that gave an impetus to retail sales was automotive fuel, which rose 5 percent year-on-year and 3.1 percent month-on-month in January. This marked the highest monthly increase in the past seven months and the highest annual increase in the past 11 months.

In the first month of the year, the volume of cosmetic and personal care sales rose by 1 percent monthly and 8.5 percent annually, while computer sales increased by 2.1 percent from December and 32.2 percent compared to January last year.

In January, food sales remained flat with a 1.3 percent increase, whereas textile, clothing, and footwear sales contracted by 0.7 percent.

However, the textile and footwear sectors continued to contract due to elevated prices.

Consumers are putting spending on ready-to-wear and clothing on hold, leading to a decline in sales, according to representatives of textile manufacturers.

Commenting on the challenges the industry is facing, they also noted that Turkish products have become more expensive compared to the competitor countries, resulting in losses in exports.

Manufacturers complained that they are losing export orders to other countries, saying that this contraction in both domestic and international markets has affected production.

They said that the losses due to the decline in production over the past two years amounted to $4.6 billion.

Rising costs also appear to be another pressing issue for non-food retailers.

Unit sales have been declining while costs have been increasing, said Sinan Öncel, the president of the United Brands Association (BMD).

“Companies’ operational costs are twice the inflation which eats into profits and forcing companies to cut on investments,” Öncel said.

He noted that inflation rose 7 percent in the first two months of 2025, but ready-to-wear and shoe prices dropped 10 percent.

“Because companies are compelled to lower their prices to prevent further declines in unit sales…Retail brands, burdened by growing challenges, are left with no choice but to shut down some of the stores and downsize their operations,” Öncel said.