Hacı Ömer Sabancı Holding, Carrefour's partner in Turkey, is seeking to double sales in its retail business to YTL 7 billion ($5.5 billion) by the end of 2010, according to the head of Sabancı's retail group. Sabancı is planning to invest YTL 600 million in its retail businesses, including its supermarket chain with Carrefour, its low-cost grocery chain with Spain's Dia and its electronics store TeknoSA by 2010, Haluk Dinçer told reporters in Istanbul Friday.

Sabancı is planning to expand its workforce in its three retail businesses by 54 percent to 20,000 and add 400 new outlets to increase the total to 1,300, Dinçer said.

The size of the Turkish retail industry is expected to increase to $237 billion by the end of 2010, compared to about $168 billion in 2007, he said. Only 35 percent of the total business is done through major companies, according to Dinçer.

Calling off Migros:

Carrefour Sabancı Ticaret Merkezi, Carrefour's Turkish venture with Sabancı, has decided to grow by opening more stores after it dropped a bid to buy Turkey's largest supermarket chain, Migros Türk, in February.

“We had two options, either to buy Migros or to grow organically,” Dinçer said. “We chose the second one, as the seller's price expectations were above our calculations. We are interested in buying local grocery chains and we will be very active and aggressive in achieving that target.”

BC Partners, a London-based buyout firm, on Feb. 14 agreed to buy 51 percent of Migros Türk for YTL 1.98 billion ($1.7 billion) from Koç Holding in the country's biggest-ever leveraged buyout – the acquisition of a company using a significant amount of borrowed money.

Sabancı and Carrefour currently run 20 hypermarkets, 102 express supermarkets and 525 low-cost grocery markets, Dinçer said. Sabancı also owns electronic goods stores in 57 cities in Turkey, he noted.

Partner for TeknoSA:

Sabancı may sell a stake in TeknoSA to a “strategic partner if a suitable buyer is found,” Dinçer said. The electronic goods industry grew to 5 billion euros last year and TeknoSA had YTL 900 million of sales in 2007, he added.

The political tension that began after prosecutors filed a lawsuit on March 14, seeking a five-year ban on Prime Minister Recep Tayyip Erdoğan and the closing down of his Justice and Development Party (AKP) for anti-secular activities, affected the retail industry's growth negatively, Dinçer said.

The retail business in the first quarter grew 14 percent more than it did in the same period a year earlier, according to Dinçer. In March this growth slowed down to 10 percent, he said. “The sales grew as much as inflation even though retailers added 25 percent more stores in the period.”