Senior industry sources told over the weekend that sales at some 100 hypermarkets and 2,500 supermarkets may have dropped by as much as 50%, pushed down by the crisis that saw the currency, the lira, halve in value since February.

Sources also gave credence to current media reports that the market capitalisation of the two main holdings, Koc and Sabanci groups, is free-falling. The market value of Koc, which operates some 450 Migros supermarkets at home and 20 abroad, is said to have dropped from US$11.8bn to a mere US$3bn in a year. That of Sabanci (currently in joint-venture with Carrefour, Kraft Foods and Danone in Turkey) has fallen from US$11.5bn to US$3.5bn.

Migros, formerly Swiss, is now valued at US$464m, compared to US$1.4bn in November 2000 and Pastavilla, also of the Koc Group, is worth US$3m as opposed to US$21m last November.

A small neighbourhood food shop owner in the fashionable Cihangir area of Istanbul, bemoaned the poor spending among his customers: “They now buy a half of what they used to in the past and stick to basic necessities.”

One senior executive maintains that neither group is about to give up its food business however. In fact, during a re-assessment of priorities, the Sabanci conglomerate is said to have identified the food sector as a core activity. In economic downturn such as now, consumer tend to seek food products offered at cheaper prices through special promotion campaigns, hurting business in tens of thousands of smaller grocery stores.

The supermarket sector in Turkey has rocketed from a single Istanbul outlet opened in 1993 and now includes over 2,500 stores, which generate an annual business worth US$2bn and control about 30% of all food sales. Further expansion may be at risk in the current climate however.

By Hilmi Toros, correspondent