Other - 2022 General Overview
In 2022, Sabancı Group’s retail business recorded combined revenue of TL 36.6 billion, up 117% driven by like for like growth in both the electronics and food retail businesses with an accelerating contribution from online sales and lean transformation activities. The increase in revenue was supported by cost efficiency measures that boosted profitability, resulting in combined EBITDA of TL 2.8 billion and net profit of TL 285 million this fiscal year.
Thanks to expanding marketplace sales, Sabancı Group’s tech retailer boosted its Total Gross Merchandise Value (GMV) by 136% compared to a year earlier. Meanwhile, along with boosting e-commerce sales, expansion in franchising and business to business (B2B) sales were the key factors that improved the Group’s food retail business over the previous year.
Protect and Grow the Core
Sabancı Group’s retail business delivers an exceptional customer experience and creates customer value by continuously improving its omnichannel and digital infrastructure, expanding its service offerings and evolving its e-commerce capabilities to respond to an everchanging market.
In its tech retail business, Sabancı Group aims to focus on customer experience and respond to changing customer expectations as a technology destination by blending physical stores with its techfocused online platform.
On the food retail side, Sabancı Group’s strategy is designed to achieve higher growth and operational profitability with an asset-light structure. Carrefoursa, the Group’s food retail company, protects and extends its core business by growing in omni-channels via harmonization of its online and offline businesses, boosting operational efficiency and improving its lean structure. The Group’s food retailer also focuses on digitalization, e-commerce and customer satisfaction to create more customer value and drive growth.
In 2022, Carrefoursa enhanced its fulfillment and delivery capabilities with a major e-commerce optimization and development initiative. The Group’s food retailer implemented a performance management system to provide continuous improvements to processes. The vehicle fleet was modified to optimize the delivery process; automated routing and business planning tools were introduced to boost efficiency. New payment solutions and partners as part of the retailer’s commercial expansion was implemented to further improve customer experience. By improving its AI capabilities, Carrefoursa also started providing customers with a personalized shopping experience, sharing real-time location-based special offers with customers to provide more targeted and relevant promotions.
Widely known for delivering the right products for its customers, Carrefoursa’s growth strategy is based on franchise expansion and organic growth. The franchising model offers attractive value enhancement and a sustainable model for both Carrefoursa and potential dealers. With a low initial investment, franchising enables small business owners and solo entrepreneurs to grow sustainably, while boosting the competitiveness of the Group’s food retail business.
This year, Carrefoursa recorded substantial growth in franchise volume and network expansion. The Group’s food retail franchise store portfolio nearly tripled in 2022, climbing to 200 stores in 37 cities and sustaining its asset-light organic growth.
As part of its asset-light growth strategy, Carrefoursa also increased its B2B sales in the corporate, wholesale, export, and HORECA (Hotel-Restaurant-Café) segments, totaling TL 1,372 million in 2022. By leveraging its existing product and market advantage, Carrefoursa has also expanded its export business thanks to international Carrefour retailers.
Invest in New Growth Platforms
Carrefoursa gained 2.1 million new customers in 2022 and reached to 8.7 million customers who are registered to the loyalty card program while the total of customers reach 164 million through its physical stores and e-commerce channels. Total number of its online users reached 28.8 million whereas the number of downloads of the mobile application reached 2.1 million in 2022.
The İklimsa business unit offers climate control product lines under its private label brand Sigma along with Mitsubishi, Samsung and Sharp brands through a nationwide distributor and service network. With the growing interest in renewable energy and lowering energy costs, İklimsa enlarged its product offering with heat pumps and solar energy systems. Thanks to its large distributor and service network, İklimsa is not only selling these products, but also implementing larger scale installation projects, providing end-to-end service to customers.
In Sabancı Groups food retail business, Carrefoursa pursued sustainable growth in its core business while also taking major steps into adjacent ecosystems in 2022. To boost its share of the business to customer (B2C) market, particularly in the readyto-eat segment, the Group’s food retailer expanded its “Lezzet Arası” restaurant network – which hosted 320 thousand customers per month- and product offerings. This effort drove an increase in Carrefoursa’s customer traffic while providing valuable opportunities to cross-sell. CarrefourSA placed more than 500 private labeled products on the shelves and increased the sales volume of its private labeled products by 165 percent in comparison with the previous year.
The Way Forward
Looking toward the future, Sabancı Group’s retail business unit plans to ramp up its sustainability initiatives and product offerings, execute a blended digital and physical strategy, move further into services that complement its current operations and effectively leverage its digitalization and big data capabilities.
Leveraging this competitive advantage allows İklimsa to offer end-to-end solar energy systems to its customers in a highly diversified range of projects.
In food retailing activities, Sabancı Group’s food retail e-commerce business is also expected to grow sustainably with optimum profitability. Carrefoursa increased CDP scores and has been listed on the “Water Security; 2022 Global A-List”. Carrefoursa applied the Zero Waste management system. In terms of organizational and cultural transformation, the rate of company’s female employees approaches to 40 percent and the half of the Head Office consists of female employees.
Other key goals include increasing its conversion rate and average basket size. To this end, Carrefoursa aims to integrate its redesigned user interface and user experience with its website and mobile app.
Moreover, the Group’s food retail company plans to expand its portfolio of franchise stores and further optimize its store network. With the objective of capturing a higher share of the B2C food market, Carrefoursa aims to further expand its Lezzet Arası restaurant network.
Looking ahead, Sabancı Group’s retail companies plan to make additional investments in customer and datadriven digitalization initiatives. Besides reaching new customers, the Group’s retail strategic priorities include uplifting existing customers and maintaining customer loyalty by effectively using big data.