Young Turks choose shopping mall over bazaar

By Daren Butler

ISTANBUL (Reuters) - For centuries, Istanbul lured intrepid shoppers with colorful jewellery and carpets which tumbled from shops in the ancient alleyways of the Grand Bazaar.

Today, the city's affluent young middle-class is embracing a different kind of shopping experience in giant glass-and-chrome malls, whose rise strikingly illustrates Turkey's emerging prosperity, but also spotlights some economic frailties.

Shopping malls are sprouting across Istanbul at a dizzying pace, with foreign money attracted by Turkey's large, young and growing population of over 70 million. According to official data, per capita income surged to $9,333 in 2007 from $7,500 a year earlier and is expected to continue rising strongly.

"Organized retailing is coming alive and competition is growing, to the consumer's advantage. The choice of brands is increasing and quality is rising," said Turan Ozbahceci, chairman of PERDER, an Istanbul Retailers' Association.

With around 2 million square meters of retail space due for completion in 2008, Turkey has the third largest stock of malls being built in Europe, behind Russia and Spain, according to real estate firm Jones Lang LaSalle.

The sector is set to double in size within five years, expanding further into the Anatolian heartland, according to the Turkish Council of Shopping Centres and Retailers (AMPD).

But there are concerns that a glut of projects could flood the market just as global economic woes put the brakes on years of strong growth in this European Union-candidate country.

Economic growth last year dipped to 4.5 percent, after growth rates of 6.8 percent on average since 2002. The government has said it expects growth of 4.5 percent in 2008.

In places where there is a high concentration of shopping outlets, there have been some early difficulties in renting out retail space, forcing retailers to refocus their activities.

"The global volatility has caused a certain slowdown in Turkey and this is reflected in turnover and means retailers need to be more creative and look at efficiency and cutting costs," said AMPD chairman Nusin Oral.

The economic outlook is also clouded by political uncertainty over a court bid to close the ruling AK Party for alleged Islamist activities.

FOREIGN MONEY

Most Turks still shop at small bakkals, or grocers, but malls are attracting the more affluent classes who want the convenience of shopping, dining and entertainment in one place.

"Turkish people have made the leap from bakkals to shopping centres," said Yusuf Esenkal, marketing manager at Istanbul's Cevahir shopping mall, which is one of the largest in Europe and attracts tens of thousands of visitors daily.

"Starting with the Grand Bazaar, Turkish people have a 700-year-old tradition of commerce and because of that they were ripe for shopping centre culture," he said.