Migros Retail CEO on Pioneering Online Grocery & The Cultural Differences in Grocery Shopping

Welcome back, everyone.

This is Omnitok Retail.

I'm Anne Mazinga.

And I'm Chris Walton.

And we are coming to you live once again from the Fusion Group booth here at Grocery Shop 2025.

And before we get started, want to give a big thank you to the Viewusion Group for helping us bring you all of our interviews here from Grocery Shop Now, Chris, Our next guest is the CEO of Migros Turkey, Mustafa Barton.

Mustafa, welcome to the program.

Thank you, thank you for having me.

Yeah, I mean, Mustafa has told us before we got started that he's a follower of our podcast over in Turkey, which is just amazing to hear.

So thank you for following us and we appreciate your support.

And so with all that said, let's get your first timer with us.

Let's get your background, your career in retail, and also tell us a little bit about Migros as well for those that may not be as familiar with them.

Okay, so this is Mustafa from Istanbul.

This is my 13th year in retail industry.

Okay.

I started as a young Engineer back in 1995.

Then I left the company Migros in 2000 to join Hewlett Packard and spent nine years there and got back by the way, when one of my best friends became the CEO of the company, he invited me back to the company and then I started restarted as the chief digital officer of the company.

The only thing with the first part of my career is I was the young engineer, 23 years old, who started the online grocery back in 1997.

Wow.

To our audience, if anyone argues or claims that they have started online grocery before that date, you can reach me.

I believe, I argue, I claim that we are the very first brick and mortar company, at least in Europe, who started the online grocery business.

But it's of course up to challenges.

So when I got back as the cdo, I was leading the IT team, the online grocery, the CRM and the business development.

And then after six years, I moved to business from being a tech guy, I became a business guy.

And three years ago I became the CEO of the retail business.

Okay, so this is Mustafa and regarding Migros Turkey.

We usually say Migros Turkey because this is a national thing, the animal Turkey, and the country is sometimes confused.

So we used, we tried to use the Turkey word.

So let me use that.

Migros Turkiye.

We are the second largest grocery company in Turkey.

We're having an annual turnover of 8, US$1.5 billion with 3700 stores all over the country.

And one of a few highlights like more than 20% of our business coming from online.

Okay.

Not bad, huh?

What else?

We're a multi banner network.

We have stores ranging from 1,000 square feet up to 100,000 square feet.

Okay.

We have neighborhood stores.

We have four court stores.

We have hypermarkets, we call it in Europe hypermarkets.

You call it big box stores.

So we also very recently started a cosmetics chain and a pet chain.

We have a dark kitchen business and we have a fintech company, a separate fintech company together with a retail media business as a separate business.

And you oversee all of that?

No, no, our group CEO is overseeing all of that.

I'm the guy who is in charge of, or the CEO of The, the mother Come.

The, the.

The.

How do you call it?

The, the retail company.

Okay, okay, got it.

Our online business is a separate company.

Our retail media.

Retail.

Retail media business, a separate company.

Fintech separate company.

So the group CEO is overseeing all of them.

Got it, Got it.

But you still have a lot under your, your, your purview as just the retailer CEO here.

So I'd love to get your perspective.

Mustafa.

You've been probably walking around grocery shop.

What, what are some of the key differences that you find between being a retailer in Turkey.

Did I say it right?

Turkey, Turkey, Turkey.

Okay.

No, no problem.

All good.

All good.

Mustafa, you're, you're a gem.

And, but what's, what's the difference between being a Turkish retailer, you think, and a US retailer?

The first thing is the definition of big.

Okay.

So you guys, I mean, what we call as big is quite different what you call as big.

Okay?

Okay.

Our big stores is like your supermarket stores.

Okay?

A big store in Turkey would mean, you know, maximum seven, eight, sorry, 70, 80,000 square feet.

Okay.

But in your case, I know some Walmart super centers like three times of that area.

And our Turkish retail is very much dominated by the discounters.

We have the copycats of Aldi's and Lidls in Turkey.

They don't have any presence in Turkey, but we have their copycats.

And each of them, the three leading, gross, three leading discounters have all more than 13,000 stores each.

Okay, so almost three make.

The three of them makes like 40,000 discount stores.

But their discount stores are different than your discount stores because they are around 3 to 4,000 squares.

Okay.

Quite smaller than that.

And the basket size, the shopping behavior of a Turkish customer is quite different than a US customer.

Our basket sizes are smaller.

Frequency is much more than yours.

Okay.

We don't have that kind of a month stock up trip.

Yeah.

Yeah, so that's the, that's the most important difference.

And the other difference probably we could mention later on, but this quick commerce thing.

Okay, so quick commerce is a big thing in Turkey because of, because of KTIR is a Turkish company.

So that's.

Those are the main differences.

Sure.

Okay, so let's, let's extend that conversation then.

So like, I'm curious, especially given your background as the former Chief Digital Officer as well, how do you think about the word Omnichannel within the Turkish context and what elements are there for migros as well?

How do you look at Omnichannel?

What are you doing to create that Omnichannel relationship with your customer?

The answer would be quite different for the country and the company because as we are dominated by the discounters, they don't have any online presence, almost no presence because.

Because it's not in their DNA, I think.

So Omnichannel would not apply to them.

And only, I think the only competitor to us from a bricks and mortars point of view is Carrefour has a presence in Turkey, but they have a very small online business.

But they are the only second company that I could mention.

But mainly the pure players are more important competitors for us from an online point of view.

And get here still alive by the way.

And Delivery Hero has something as well.

Alibaba has a presence as well.

Really?

Alibaba owns the largest marketplace in Turkey.

And by the way, we have Amazon Turkey, we have Alibaba.

We have no idea.

Nasdaq listed Turkish marketplace or marketplace business in Turkey is a big one.

So we are the only brick and mortar, I can say with a significant amount of online grocery business.

And for us, Omnichannel is everything okay.

So we try to do everything by design.

Omnichannel, okay.

As we are quite old in this business, like 28 years we have been in this online grocery business.

We try to make everything.

Omnichannel.

We try to make every decision from an Omnichannel channel point of view.

I think the most important thing is I was the young engineer who took over the management of the company.

Company.

One of my friends called this as a reverse takeover.

Usually the offline guys dominate the retail business, but in my case you can see how omnichannel we are.

Yeah, right.

Well, 20% is nothing to sneeze at.

Right.

That's pretty significant.

Right.

And so as you're thinking, Mustafa, about kind of the future of your digital capabilities then at your organization, what do you think is going to change in the Next three to five years.

How do you plan to expand upon those?

Especially having started it back in 95.

So from a digitalization point of view, the last three years, three, four years were totally around cost optimization.

Okay.

So that's why we decided to make huge investments in in store technologies like ESL and Sasiris checkouts.

And you know, now I think we've done a lot of investment on that part.

The next three to four years would probably be around the AI thing.

Okay.

Even though I'm not a very big fan of this, you know, hypes, you know, I usually, this is a personal thing.

I've never watched a movie when it is very popular.

Okay.

I've never read a book when it is, you know, very popular.

But I definitely see AI is a very, very transformative thing.

But I still believe that computer vision, machine learning, still we have to do a lot of things before going up to gen AI.

But definitely gen AI is another very transformative thing.

And the last thing that we consider as a very important thing is automating the fulfillment part of our online grocery.

We have great technologies there.

We have some, we have our own robotic solutions there.

Okay.

Yes.

So we're investing a lot on that.

And finally the supply chain automation, the warehouse automation is another very important step for us.

Got it.

So I'm curious, when you said self checkout, like how do you actually do self checkout over in Turkey?

You know, today almost one third of our stores are equipped with self checkouts.

Even though we have like more than 60% of our number of stores coming from small stores.

We even started putting self service checkouts into our small stores as well.

Because we used to think that self service checkouts were for the big box stores, but not anymore.

We're putting into very small stores to save ftes the full time employees.

So it's a labor process and we.

Saw that it's increasing the customer engagement and we have better shopper experience in some stores where we have self service checkouts.

And do you do it like with the traditional self checkout machine?

Do you do it with an app?

Like how does it work?

Okay.

We tried scan and go years and years ago a lot of times, but it didn't work.

Didn't work.

I think, I mean it could be cultural thing, but I've spent personally so, so much time on that, but it didn't work.

You've tried it enough.

Yeah, but self service checkout really works.

People at age of 60s, 70s, they, I mean they are big fans of self service checkout.

Whereas Sken and Go never worked.

I think it's what I mean by cultural.

Turkish people, I think, think that shopping should be done by two free hands.

Two free hands?

Yeah.

So that's why they don't want to hold it.

They don't want to hold the mobile in their hands.

Sure, you know.

So, Mustafa, what else are you working on?

Because you were the first to go to digital grocery.

You did scan and go years ago.

What else are you working on right now?

That might be a future indicator for us here in the us I think.

Fintech financial technology is a big thing for us.

Yeah.

We are a shareholder of a digital only bank in Turkey.

Together with them, probably in six months of time, we're going to be introducing our financial vertical online only.

Okay.

So we're going to be giving credit, we're going to be getting deposit money transfer.

So I think this is going to be the next big thing, which I don't see much in us.

Not very much.

We've been talking about it.

We feel like there's a need for it.

Yes.

But only a few players are really moving into that.

Well, thank you so much.

Thank you.

It's a real pleasure having you.

Thank you very much.

It's always great to meet a fan too.

So thank you again for your support.

Thanks to the Fusion group for their support as well.

And Anne, as always, be careful out there.