Our principal business objective is to maintain sustainable profitable growth in the Turkish cash and carry market by focusing on our core regional markets, as well as expanding into new cities. The cornerstones of that strategy are the following:
Continued Focus on Same-store Sales Growth
We focus on increasing sales in our existing stores through expansion of our customer base, growing basket size spent by customers, competitive pricing and increased frequency of customer visits. To that end, we plan to continue our CRM initiative, which we believe provides us with unique insights on our customers’ habits and purchasing trends. We use our CRM capability to track three different types of customers:
(i) we monitor our new customers and follow closely their purchasing routines, attitudes and behaviors, which helps us to tailor both general and customer-based promotional campaigns; (ii) we pursue close relationships with our most profitable active customers to ensure we are meeting their needs and taking necessary actions in terms of personal visits and tailored promotional campaigns; and (iii) we study the behavior of those customers who have visited our stores and did not return, with the goal of understanding the potential reasons for failing to convert them into regular customers. Our central CRM team is in charge of monitoring our customers on a monthly basis.
To reinforce this strategy, our regional and store managers are in charge of identifying and contacting new potential customers within their respective regions and cities. Examples of targeted customer categories include existing categories such as bakkals, traditional markets and corporate institutions, as well as new customer categories such as farmers. HoReCa businesses represent another customer category we believe has the potential for increased sales. We believe the cash and carry sector will benefit from the growth in the HoReCa market in Turkey.
Continued Rollout of New Stores
We intend to continue expanding our existing store network by opening new stores in our existing regions, as well as expanding into new cities. We attempt to pace the roll-out of new and aim to add 5 to 10 new stores on average per year over the near- to medium-term in order to maintain focus on our operations and obtain attractive lease terms from landlords. In addition to this, we aim to develop the franchising system which we acquired in the mid of the 2014. We focus on expanding the store network and geographical reach of the system.
Cost Structure Management
In addition to our focus on revenue growth, we also aim to reinforce our position as the industry cost leader, and are consistently focused on initiatives to continue improving our margins and profitability.
We intend to further enhance our profitability by (i) using our increased purchasing power to seek further cost efficiencies, (ii) improving our product mix by attempting to reduce the proportion of our sugar and tobacco products, (iii) continuing to focus on productivity and (iv) working to increase the proportion of private label goods in our product range.
Our strong cost discipline and related advantages and efficiencies resulting from our increased scale will, we believe, continue to drive our profitability as we grow our business. We also aim to continue to focus on optimizing our merchandising mix to further enhance our profitability. To that end, we plan to place less emphasis on such lower-margin categories as tobacco and sugar whilst according increased focus and attention to expanding higher-margin categories such as bakery products and hard goods.