Young Ceo’s European Plan

Migros’s young leader Özgür Tort was appointed general manager in August 2008. The most important item on his agenda is the target of doubling turnover to TL 10 billion within four years. In order to reach this goal, Migros needs to achieve a turnover of TL 6 billion in 2009 and open 400 stores. Tort said that, so far in 2009, they are on track to achieve this target. In the first quarter of the year they opened 97 stores and increased the number of customers by 16-17 percent. Migros General Manager Özgür Tort evaluated 2008 and explained what is on the agenda for 2009.

*We are going through a major crisis. Has this crisis created changes in the way you do business or in your business models?
The essence of Migros, its nucleus, is innovation, speed, dynamism, and change according to the future of people. What ensures this change is looking in from the outside and this creates innovation and speed. In very dynamic sectors, such as foodstuffs retailing, our system needs to keep pace with very variable customer expectations. We need to stay ahead of trends in the sector and historically the approval of our customers has proved that we have been successful in this regard.

*2008 was a difficult year. Everybody had their share of difficulties. What was Migros’s share?
There was an increase in customers and productivity in 2008 and we achieved an operating profit of 5.8 percent. In 2008, Migros achieved a rate of 7.6 percent in EBITDA (Earnings before Interest, Taxes, Depreciation, and Amortization), which is a very significant figure in retailing. This is by far the best figure in our sector. It is an extremely good rate internationally. I mean, we recorded an increase of 15 percent in our sales and raised both our net profit and our operating profit. The basket became cheaper but there was a significant increase in customer traffic.

*How much did your basket contract?
In the first quarter of 2009, our customers bought 19-20 percent more fruit and vegetables with the same money. The decline in the value of the basket during this period was the result of a fall in prices and an increase in the frequency of shopping. This had an impact of around 6 percent in the final quarter of 2008. In fact, this is not an actual decrease. Because, when we look at it in terms of weight, there was no contraction; the decline was in value. On the other hand, we do not see a contraction when we look at our sales. This means that customers began to meet their needs by dividing them into smaller shopping trips. As a result, the average frequency of going shopping increased and they were able to buy more cheaply. In the first quarter of 2009, there was an increase of 15-16 percent in the number of our customers.

*What kind of year do you foresee in 2009? What projections have you made?
Prior to 2009 we had formulated a growth programme and 2009 was going to be the first year. We wanted to double the size of Migros within four years and make it a TL 10 billion company. In order to achieve this goal, we targeted opening a total of 400 stores in 2009, which meant eight a week. We redefined our strength. The target of opening 400 stores a year would be the fastest rate at which Migros had ever opened stores. At the moment we have 1,296 stores. In the first quarter of 2009, we succeeded in opening our target of 97 stores. I mean, we are on track. We are stressing localisation this year. We are saying that everybody in Turkey should shop at least once at a Migros Group store. At the moment, we have a presence in 65 provinces. We shall soon expand to cover all of Turkey.