Istanbul shopkeepers in serious trouble amid high retail prices

Meral Candan / DUVAR

Shopkeeper Nihat Özcan listens to the requests of a customer waiting in line while taking another customer's order on the phone. His assistant writes the address on a piece of paper while making a note in a thick store credit notebook that keeps track of customer's purchases on credit. Özcan, who has run a market in Istanbul' Bomonti neighborhood for 14 years, has seen his already-thick notebook swell even further.

“Previously, customers wouldn't ask the price of products while shopping. Now they are both asking and requesting a cheaper alternative if one is available. Compared to last year, the number of people shopping has decreased, and in particular our alcohol sales have dropped by 70 percent. Large families generally do not live around here. For that reason, really large purchases were never being made, but lately people are buying everything by the gram. Most of the people shopping are buying on store credit,” Özcan said.

Özcan explains how Turkey's economic crisis has affected his 50 square meter shop in the Şişli district neighborhood of Bomonti, which is an area that bears an important cultural and historical legacy. Due to its close proximity to the city center and a variety of nearby public transportation options, the neighborhood has become home to a large number of white collar workers, cafes, and a rich nightlife based around the Bomontiada complex, a venue located in the historic Bomonti beer factory that has been outfitted with bars, restaurants and the Babylon concert hall.

However, due to rising prices, like everyone else, Bomonti's residents have changed their consumption habits. Those who feel the effects of this change the most are the neighborhood's shopkeepers.

According to a study conducted by a confederation of Turkish labor unions, overall expenses in October of this year increased by 36.9 percent. Meanwhile, the prices of electricity, natural gas, and fuel have risen by 60, 52, and 30 percent respectively. A lengthy list of prices increases concerning everything from food to furniture to electricity and fuel has weighed heavily upon consumers and shopkeepers alike.

Hasan, who works as a waiter at a restaurant serving oven-baked specialties such as pide and lahmacun, says that rising food prices are not reflected in the restaurant's menu in order to not lose customers:

“The prices of the ingredients that we buy are increasing. So that we don't lose customers, this is not reflected in the menu, but for the last two months our expenses have been higher than our revenue,” Hasan said.

Güven Aydın, who has run a market for 30 years and has always kept a store credit notebook, says that he is unable to replace the products he sells due to increasing prices:

"The electric bill around this time last year was 350-400 lira; this month was 650 lira. Customers are in the same situation, and this is reflected in sales,” Aydın said, emphasizing that the number of customers purchasing items on store credit has increased particularly in the last several months, and that some customers who pay off their debts again start buying goods on credit the next day.

When reminding Aydın that a family of four siblings in Istanbul's district of Fatih committed suicide in November via cyanide poisoning likely due to money problems, as the family had a debt to their market of 2,260 TL that they were unable to pay for two months, Aydın said while looking through his store credit notebook that the situation in Şişli, a mostly middle and upper-middle class district, wasn't as bad. However, Aydın added that people who used to pay their debts on time were delaying them, and that due to a lack of cash flow the store's selection of items has decreased.

“In order to pay my tax debts and buy products, I need cash,” said Aydın, who added that he had applied for a bank loan, was very troubled and no longer wished to talk about the subject.

One of Bomonti's oldest shops is the Resul dry cleaner. The face of Resul Özbey, who smiles and greets those he passes in the morning, falls when he is asked about how his business is doing. He explains the effort he has taken to maintain the business that he has run since 1968, and takes out his electric bills for the last two months from a drawer. Bills like a 1,209 lira charge in October and a 1,945 lira charge in November have created major problems for Özbey.

“There are people that drop off their outfits for dry cleaning and don't pick them up,” said Özbey, adding that he has lowered his prices since last year in order to not lose customers. However, he is still unable to maintain the same level of business as last year, and that his employees, who once would finish their shifts at 7PM, now leave work at 5PM due to the decline in work.

Sabri has run a women's hairdresser for the last five years. The hairdresser, which just a few months ago had lines of customers waiting, is currently empty. Sabri says that because all of his materials are imported, expenses have risen by 100 percent, and that due to a decrease in the number of customers visiting his salon, in order to deal with the crisis he is planning on letting go of some of his employees.

“Every morning there were always a few customers who would come to get their hair styled. Now it's sporadic,” said Sabri, adding that many of his customers were living off the rent of houses they own or retirees trying to make it through the month with their pensions.

“They are people that take care of their appearances,” said Sabri of his customers, adding that those who used to come to have their hair dyed every month either prefer to do it at home or opt to have it done every few months, and that the situation was the same for those getting haircuts.

According to Sabri, an increase in unemployment is a primary factor in the decline in his business:

“If you have a job to go to in the morning, you go to the hairdresser more regularly,” he said, adding that many of his customers have either left their jobs or lost them due to their places of work closing down in recent months.

During our conversation, a customer comes in for a haircut. Sabri asks for permission to return to his work, mentioning that his customer closed her office due to the economic crisis.

“There's not much else to say, the situation is clear,” Sabri said as he cut his customer's hair.