REPORT · 2019-07-05 · Workñg Prñc˜ples des˜gnated under the roof of Yıldız Holdñg ñ...

SUSTAINABILITY

REPORT

2017S

US

TAIN

AB

ILITY

RE

PO

RT

2017|

ŞOK

www.sokmarket.com.tr

/SokMarketler /sokmarketler /SokMarketler /sokmarketler

2017

SUSTAINABILITY

REPORT

TAB-LEOFCON-TENTS

ABOUT THE REPORT

ABOUT USOur VisionOur MissionCORPORATE MANAGEMENTBusiness EthicsRisk ManagementThe Structure of Sustainability ManagementMATERIAL SUSTAINABILITY ISSUESStakeholder Dialogue

PRODUCT - INSPIRE

PRODUCT RANGEProduct Safety and QualityCUSTOMER ORIENTATIONCustomer Experience Customer Satisfaction Survey Customer Relations ManagementCepte ŞOK: Click & CollectSUPPLY CHAIN MANAGEMENTLocal SupplyOperational Efficiency and Digital Applications

PEOPLE - EMPOWER

EMPLOYEESEmployee Development Performance and Career Management Need-Based Training SessionsEmployee Satisfaction Occupational Health and Safety

PLANET - RESTORE

ENVIRONMENTAL IMPACTEnergy ManagementPackaging and Waste Management Total Loss Prevention Committee

PERFORMANCE INDICATORS AND GRI CONTENT INDEX

Social Performance Indicators

3

11

19

25

28

2017 SUSTAINABILITY REPORT 1

Dear Stakeholders,

Dear Stakeholders,

With over 5,000 stores in 81 provinces of Turkey, we are committed to offering our customer exceptional service with our strategy of every day low prices. Since 2015 every day, we are opening three new stores on average. This has allowed us to completely cover the country. With the increase in the employment we provide every year for 4,000 people, the number of suppliers we work with and our number of customers, so has our field of responsibility increased more and more with each passing day, and is continuing to increase. We are therefore publishing our first Sustainability Report to transparently demonstrate to the public how we are conducting such an operation, as well as to show what effect our activities have on society, the economy and the environment.

What lies at the core of our efforts are the happiness of our employees, the satisfaction of our customers and the development of our suppliers. We not only create added value for all of our stakeholders through a sustainable business model, but also aim for efficiency within the retail industry competition and thus distinguish ourselves among the discount chain markets.

We are implementing projects to ensure energy efficiency in all of our operations from logistics to our stores. This helps us play our part in the battle against climate change by reducing carbon emissions.

In addition to this, we save our customers time and make their life easier thanks to our app, called Cepte Şok: Click & Collect). The shopping app was made possible by tracking the new shopping habits of our customers.

We are delighted with the fact that we completed the public offering in the first half of 2018. We will use this source, which we will obtain in this new period, for our new future investments and implementations that we will carry out so as to achieve our goals that will successfully take us even further. We predict that the public offering, and our accelerated sustainability efforts, will provide our company with important advantages when it comes to corporate management. This is in addition to the development of accountable and transparent business practices and improving our social and environmental performance. In this regard, we aim to maximize the value of both our financial and non-financial assets.

I am proud to be able to share our first Sustainability Report that covers our sustainability efforts and future goals. I would like to take this opportunity to thank all our stakeholders, and in particular all my colleagues, for accompanying us on this journey.

CEOUğur Demirel

1ABOUT

THE REPORT

The first Sustainability Report of Şok Marketler Ticaret A.Ş. is published to share the company’s sustainability performance. We would like to share with our stakeholders our accelerated sustainability efforts along with this report.

We have prepared our report in compliance with the ‘Core’ option of the Global Reporting Initiative (GRI) Standards. We have also taken the Food Sector Supplement as a reference in this Report and benefited from the Sustainability Accounting Standards Board (SASB) Processed Food Guide.

We have determined our primary issues that constitute the framework of our report with the participation of both our internal and external stakeholders in accordance with the AccountAbility AA1000SE Standard - the international stakeholder engagement standard. Where necessary, our performance between the 1st January and the 31st December, 2017, which has been included in this report, has been compared to past data to demonstrate the changes that have occurred.

About the Report

Our activities started in 1995 with 13 stores. We began a period of expansion after joining Yıldız Holding in 2011, and incorporated Dia, Onurex, DimDown and Teda stores. Since 2015, our organic growth has picked up speed. By the end of 2017, we achieved a total of 5,598 stores in 81 provinces of Turkey, including the 498 mini-discount UCZ stores and 5,100 stores, along with our 24 distribution centers and more than 24,000 employees. With all of these, we are providing our customers with easy access to high quality products at low prices without compromising on our vision and mission, which act as a guide for our company.

With our rich product portfolio of original and national brands, along with our range of fruit and vegetables, we make sure that our customers instantly meet their basic household needs and from the nearest point to their home. Our aim is to provide the best possible service through our distinctive business model, strategy of every day low prices , as well as our store concept, designed in line with customers’ needs, to offer an easy shopping experience.

About us

24.255 employees

5,100 stores in 81 provinces

650 million store visits

1,000 suppliers

9.5 billion TL net sales revenue

To provide our customers with the most convenient shopping experience, and become the first choice for our staff and business partners with our distinctive business model, diversified range of quality products, reasonable prices and advanced service understanding.

Our Mission

To be Turkey’s leading grocery retailer, and the most preferred grocery retail brand, while continuing to create real value for our investors.

Our Vision

4 2017 SUSTAINABILITY REPORT 5

ABOUT THE REPORT

INSPIRE EMPOWER RESTORE

ŞOK MARKETLER

Questions, opinions and suggestions can be sent to [email protected]

Every daywe aim to give our customershappy shopping experience. “

“

Further details on corporate management can be found on www.sokmarketyatirimciiliskileri.com


ABOUT THE REPORT


ŞOK MARKETLER

Corporate management provides practices that make it possible for us to efficiently manage our company performance, develop future-oriented strategies and create long-term added value in the competitive conditions that we are a part of. As a company, we are currently in a period of transformation in the field of corporate management. Our public offering journey and the sustainability transformation we have begun under the leadership of Yıldız Holding, as well as the steps we have taken in this journey towards achieving a corporate structure, play an important part in this development. Our goal is to develop our company structuring and improve our performance through fair, transparent, accountable and responsible business processes.

The Board of Directors, which lies at the heart of our corporate management structure, is comprised of seven members. The meeting schedule of the Board of Directors is determined at the beginning of every year. The Executive Committee, which meets weekly and discusses the strategical, financial, and operational issues of our company, consists of 12 members representing all functions of the company under the lead of the CEO.

The boards and the committees that play an active role in our economic, environmental and social activities are as follows:

Corporate Management

Business Ethics is at the core of our business activities. We carry out our business in a trustworthy manner and within the principles of business ethics while working towards creating a long-term respected company culture. Such efforts will distinguish us from our rivals in this highly competitive sector and help us position ourselves as a trusted company in the eyes of our customers. We are guided by the Code of Ethics and Working Principles designated under the roof of Yıldız Holding in our business processes, and embrace an honest and fair working manner to conduct our business. We ensure that we act ethically in all of our dealings with our customers, employees, suppliers, rivals, future stakeholders and business partners, as well as with governmental bodies and the society. Stakeholders are able to report on ethical issues via the ŞOK Non-Compliance Report Center (UBM), the Yıldız Holding Customer Contact Center (MİM) and the Yıldız Holding Ethics Hotline channels. Our employees use the Ethics Information Hotline (0216 524 34 24) or the email address: [email protected] to make their complaints through Yıldız Holding.

In case of any irregularity, the subject matter is evaluated on-site at the Branch Human Resources Committee if the respective irregularity is a narrow-scoped one. If situations such as a decision not being possible, the proof not being conclusive, or the irregularity including more than one party, the issue is passed on from the Branch Human Resources Committee to the Disciplinary Board.

Business ethics also requires our employees to act in a conscious manner in the fight against bribery and corruption. Purchasing, construction and investment processes, warehouse management processes and store operations constitute our risky areas in this regard. In these processes, we strictly adhere to the Code of Ethics and Working Principles. We communicate the Code of Ethics and Working Principles to our employees and taking their written approval. We create awareness among employees by organizing training sessions on ethical principles at the headquarters.

Business Ethics

We have formed a Sustainability Board within our company so as to shape our strategic investments that we will carry out to increase the value generated in the areas of environmental, social and corporate governance. This structure has been shaped as part of the transformation effort initiated by Yıldız Holding to ensure that our company embeds sustainability into its culture to increase its competitiveness and brand value. Among the responsibilities of the Sustainability Committee are to create the sustainability strategy, goals, road maps and policies; to map the risks when it comes to environmental and social issues and corporate management, and manage them in a pro-active manner; to designate sustainability-related performance measures; to provide the employees with information regarding these areas; to make efforts aimed at internalizing relevant policies; and to plan for efficient communication with stakeholders. The Board meets at least twice a year to plan for its work schedule.

The Structure of Sustainability Management

Risk Management

Our company’s risk management activities are managed in line with Yıldız Holding’s framework approach to risk management. With our public offering process, we are strengthening our structuring for a more systematic Risk Management approach. As part of our sustainability efforts; in addition to our traditional business risks such as security, product safety, supply chain, as well as occupational health and safety, we will also begin to consider all of our financial and non-financial risks in a more encompassing approach.

CEOChairman

of the Committee

CFO CommercialDirector

MarketingDirector

Sales OperationsDirectors

Construction,Investment

andTechnical

PurchasingGroup

Manager

ProjectManager

QualityManager(Board

Secretary)

HumanResources

GroupDirector

We strictly adhere to the Code of Ethics and Working Principles ““

In addition to CEO and CFO, directors and managers from important departments, such as Sales Operations, Commercial, Human Resources, Quality, Construction, Investment and Technical Purchasing, are members of the Sustainability Committee.

The Sustainability Initiative sponsored by the Yıldız Holding Board, contributes to our company for corporate reputation and risk management. The initiative also makes assures that our sector’s global agenda, mega trends, newly developing regulation environment (including the UN Sustainable Development Goals) and the main issues raised by all stakeholders are managed efficiently. All of our activities are reported to Ali Ülker, the Vice Chairman of the Board of Yıldız Holding, and the main sponsor of the Sustainability Initiative.

• The Executive Committee

• Commercial Committee

• Disciplinary Board

• Auditing Committee - New

• Corporate Management Committee - Not yet finalized

• Human Resources Committee

• Expansion Committee

• Supply Chain Management Committee

• Sustainability Committee - New

• Digital Board

• Total Loss Committee


ABOUT THE REPORT


ŞOK MARKETLER

We are fully committed to establishing efficient communication with our mapped stakeholders via several different methods whenever required. Newly created actions that will improve stakeholder relations have an important place in our future strategy.

Stakeholder Dialogue

At Şok Marketler, we adopt the motto of “sustainability is our promise for future generations” which is developed by Yıldız Holding and brings an holistic management approach. This approach helps us to develop our performance through an approach focused on the three main themes of Product, People and Planet.

Within this scope, our corporate goals are:

Product – Inspire: To make customer safety a focal point, and ensure that our products are delivered to our customers at the highest standards and under transparent and attracting conditions, while INSPIRING them in adopting a healthy eating and living style,

People – Empower: To EMPOWER the community by engaging in efforts that will provide social and economic development for the employees and the community and embracing business models that improve social equality,

Planet – Restore: To RESTORE the environmental conditions for future generations by protecting natural resources and prioritizing energy efficiency and savings.

1 In 2015, 193 United Nations member states ratified the 17 Sustainable Development Goals that aim to put an end to extreme poverty by the year 2030, as well as to fight against inequality and injustice and to protect the planet. For more details of the goals, please refer to http://www.kureselhedefler.org

receive opinions from stakeholders, we have shared the issues with 51 people from different groups, such as non-governmental organizations, suppliers, employees and public institutions mapped according to the degree of priority and, as a result, we have confirmed our issues of priority. Our stakeholders, who responded to the analysis, emphasized the most important two global trends leading the retail industry as being digitalization and the changing of customer behaviors. We have shaped our common and priority issues on which we need to focus.

Material Sustainability Issues

In this regard, we have conducted the field analysis of stakeholder engagement based on the methods available in international standards and held in-depth interviews and workshops attended by our executives and specialists from different departments of the company. Decisions made on the basis of these interviews were ratified at the Board of Directors level.

In this analysis, we have taken a risk- and opportunity-based perspective to evaluate the areas that can increase our environmental, social and administrative performance with reference to the global and sector trends, as well as the Sustainable Development Goals . Following a detailed literature review, we have identified our main priorities. In order to

Please refer to the applicable section of our report

How Do We Manage? Customer Orientation

ProductSupply Chain Management

EmployeesEnvironmental Impact

Supply Chain Management

Customer Orientation




Employees

Environmental Impact

Material Issues

Digital transformation

Food waste or losses

Retail customer experience

Responsible supply chain management

Responsible products and fair trade

Product safety and quality

Employee rights, satisfaction and loyalty

Recycling and packaging waste

Impo

rtan

ce to

sta

keho

lder

s

Importance to Şok Marketler

Collaborations

Responsible labelling on products

Talent Management

Support for local products and producers

Occupational health and safety

Recycling and packaging waste

Digitalization and smart storesResponsible products and fair tradeFood waste or losses

Environmental foot print of stores and administrative management buildings

Logistical and operational excellence

Employee rights, satisfaction and loyalty

Product safety and quality

Responsible supply chain management

Retail customer experience

Stakeholder Group Method of CommunicationFrequency of

Communication

Internal notification emails, academic şok, meetings, ŞokNet (intranet system), surveys, social media

Website, Cep’te Şok, Communication Center, product catalogues, notification emails and short messages, social media, surveys and meetings

Audits, Chain (intranet system), B2B meetings, emails, social media

Visits

Joint projects

Press bulletins, press meetings, social media

Congresses, conferences, seminars etc.,joint projects

Joint projects, conferences and training sessions

Events such as congresses, conferences, seminars, fairs etc.

Employees

Customers

Suppliers

Public Institutions

Business Partners and Advisors

Media

Non-Governmental Organizations and Associations

Universities and Research Centers

International Organizations

Continuously

Continuously

Continuously

Continuously

At least once a month

Continuously

Continuously

Continuously

Continuously

High PriorityPriority

Material Sustainability Issues

2PRODUCT

INSPIRE

Product Safety and Quality

Protecting the health of the millions of the customers who shop at our stores is our primary responsibility. From the process of ensuring safety from the fields to the dinner table, as well as offering our customers healthy products, we do not neglect any national or international quality standards. We frequently check all our suppliers and continue working only with those meeting every single one of our standards. Every year, we inspect more and more suppliers to see if they comply with product safety and halal food standards. There was a 21% increase in the number of audited suppliers in 2017 compared to 2015. The control and auditing procedures we implement support our suppliers’ development and encourage them to always keep their standards at the highest level.

We also conduct audits of our product sales and storage facilities, in addition to those we perform on suppliers. During these procedures, we check product safety in our stores and warehouses, thus ensuring that we comply with international quality standards.

At Şok Marketler, it is always our priority to deliver products to our customers at the highest standards and under transparent and attractive conditions. We make the customer safety a focal point and hope to inspire them to adopt a healthy eating and living style.

We manage our principle of customer orientation, and the overall aspect of our supply chain, through this understanding and in an holistic manner.

PRODUCT - INSPIRE

The most important strength that separates Şok Marketler from the other discount chain stores in Turkey is the rich variety of affordable and quality products we offer our customers. We always aim to respond to the diverse needs of our customers with the wide range and varied options.

We bring products of national and international brands to our customers in our stores under food and non-food product categories. The exclusive brands such as Mis, Piyale, Mintax, House, Amigo are presented on our shelves alongside best-selling national brands. We attach great importance to ensuring that all products are always high quality and safe.

Product Range

At Şok Marketler, we place our customers at the center of our products and services. This is because maintaining customer satisfaction at the highest possible level is crucial for our business success. We strive to make sure that all of our customers, whether they visit a store or shop online, become satisfied with a high quality budget-friendly shopping experience.

We closely follow the rapidly changing expectations and needs of our customers, and improve their shopping experience through innovative and digital solutions. We have provided our customers with the opportunity to shop online via our mobile app called Cepte Şok - a first in our field of activity.

With our products meeting all budgets, we aim to be accessible in all regions of Turkey. It is for this reason that we opened 1,100 new stores in 2017, meaning that we now have over 5,000 stores in 81 provinces. We have completely renovated our stores’ concept and diversified our product range.

The vast majority of our customers are individual customers. The number of visits our stores received increased by an average of 60% in 2017, when compared to 2015, to over 650 million.

Customer Orientation

All of our business processes have been planned in accordance with the IFS Logistics and the ISO 22000 Food Safety System Certification, both of which ensure product safety. We aim to complete the certification process by 2019. An additional goal for 2019 is for us to ensure compliance through effective management for all of our product safety processes to ISO 9001:2015 Quality System Management standards. We therefore require all of our suppliers to hold either IFS and BRC International Food Safety Standards or a FSSC 22000 Food Safety System Certificate.

Among the audits we conduct on our suppliers are ones on compliance to Ministry of Food, Agriculture and Livestock Turkish Food Codex Legislation, as well as inspections on halal food issues and some other areas dependent on the type of product: organoleptic, caliber, weight, packaging, labelling etc. We aim to publish our Supply Chain policy in 2018 and make social and environmental criteria part of our supply chain audits.

In addition to this, a “Call Management” system has been developed to report products from a supplier that are faulty, and thus prevent customers from accessing them. This means that an effective monitoring system has been developed that prevents any situation that might threaten our customers’ health.

We have developed a digital system which ensures that faulty products reported to the call management system are returned to the supplier. Suppliers monitor their faulty products on the system and perform the necessary quality corrective measures.

Call Management

Our quality control team recheck the product according to calls relayed from stores, and any problems with the product that originate from the supplier are called in. The aim of this procedure is to ensure product safety for our customers, improve the suppliers’ quality systems and regularly reduce the number of customer complaints and product destructions every year. As a result of our efforts, the average number of such calls received by stores each year was 5.5% in 2017 with a fall of 47% as compared to 2015.

Customer Experience

It is our aim to provide our customers with a shopping experience that exceeds their expectations. This is in order for us to be more competitive in our sector and become a preferred choice of brand for our customers. We are able to achieve this goal thanks to our unique business model that makes us stand out among our rivals in the five main areas of proximity, affordability, diversity, easy and convenient shopping, national and original branded products.

We are as close to our customers as possible with our wide and constantly growing network of stores. As part of our every day low prices strategy, we offer customers various promotions including different advantages, along with affordable products of high quality. Around 1,500 different products can be found on our shelves, providing customers with a one-stop shop for all of their needs. Our stores with a concept renovated in 2015 provide customers with an enjoyable and convenient shopping environment with products organized by category within wide and well lit aisles.

Average per Store Number of Calls

10,4

5,5

20172015

47% decrease

Every day we aim to give our customers

happy shopping experience.


ABOUT THE REPORT


ŞOK MARKETLER

We are working to supply all of the basic needs products for our customers. “

“


ABOUT THE REPORT


ŞOK MARKETLER

14.630

2015 2016 2017

19.071

29.000

Number of CustomerRequests Forwarded to MİM

Retail Technology AwardsThe annual IDC Retail Technology Awards recognizes the best digital projects of retail, technology and e-commerce companies. In 2017, the Cep’te Şok mobile app won the “Best Digital Channels Project” award.

Cepte ŞOK: Click & CollectCustomer Satisfaction Survey

We believe that it is impossible for us to develop without obtaining customer views regarding our products and services. To this end, we engage in some activities to efficiently manage customer experience and actively follow changing customer habits. Among these activities are customer satisfaction research.

Since 2015, we have been conducting Mystery Shopper Evaluation in all of our stores under four main headings: products, the store’s physical condition, personal service quality, and the fruit and vegetable ranges. We evaluate our stores’ performance through the eyes of our customers via our visits conducted twice a year. According to the results of our research, evaluation score reached 87% in 2017, an 18% increase compared to 2015. This means we have achieved the category of “Very Good” by exceeding the 82% sector average.

In addition, we became the second brand that came to mind in the sector in 2017 in the Brand Health Survey, where our customers evaluated our brand image.

Customer Relations Management

We are not content with only conducting research to develop a better experience; we are also listening to what our customers have to say to us by making it possible for them to reach us at any time. To this end, it is among our priority issues to encourage our customers to use our communication channels to share their demands, opinions and expectations.

We receive and reply to customer feedback via the communication form available on our website (www.sokmarket.com.tr/iletisim/iletisim-formu), the Yıldız Holding Customer Relations Center (MİM) hotline 0212 576 33 00 and our email address [email protected]. We carry out the necessary actions related to customer complaints within 3 business days. The number of calls or messages we have replied to reached 29,000 in 2017, almost twice what it was in 2015. 40% of our customers communicate with us via the internet, and 60% by telephone. The security and confidentiality of the information belonging to all of our customers is guaranteed within the agreement between us and Holding MİM.

2According the methodology used by the research company, a rating of 85 points or above equates to a “Very Good” rating.

As is the case in the rest of the world, Turkey also witnesses that the customer shopping habits change in parallel with technological developments and that the amount of internet shopping is increasing with each passing day. As a close follower of such developments that are of particular concern to the retail industry, we have initiated a digital transformation in several different areas in our company. We also save our customers time and make their life easier thanks to our click & collect app ‘Cepte Şok’ which we have developed by considering the habits of our customers and which have taken a leading place amongst our digitalization projects as an app making online shopping possible. Our app operates on a “Click, Come, Buy” basis. Customers select the products they want, specify a time to collect them, and they can then pick them up as a prepared packed from their nearest Şok Market within the same day without having to wait. Our mobile application provides customers with an easy and rapid online shopping experience, while allowing them to save money by being informed of current campaigns and discounted products.

We want to be everywhere that our customers are. The Cepte Şok application was launched in 18 stores in July 2017, and had expanded to 38 stores and around 3,000 users by the end of the year. We are planning to expand the use of the app to all of our stores in the future.

A.L.F.A AwardAs part of the contest where Marketing Turkey assesses the complaints posted on sikayetvar.com to come up with the best customer experience managing brands from 25 different sectors, we won the A.L.F.A Award as the discount market best managing the customer experience in 2016.

Select your Şok Market and

start shopping

Pick a time to collect and pay

Immediately pick up your order

from Şok Market


ABOUT THE REPORT


ŞOK MARKETLER

• Advanced Planning and Demand Forecasting

Through the system developed as part of our advanced planning and order forecast project; the product sales forecasts will be shared with our suppliers, so they can work more effectively by planning ahead more accurately. This allows us to take our principle of having the right products in our stocks to even greater extremes.


Local Supply

We prefer to buy locally to support the development of our local producers and increase their business capacity. 100% of the products on our shelves are supplied by local companies. We are proud to support small producers and help our regional produce survive.

Our aim is to develop our business partners along with our company. Our suppliers both enhance their quality standards and expand their product range when they start complying with our working conditions. We have thus transformed this mutual learning process into a win-win relationship.

Operational Efficiency and Digital Applications

The digital transformation in our company is being implemented to make our activities more productive, reduce the risks by preventing man-made mistakes and improve our services. The digitalization helps us to manage our supply chain more effectively.

In order to achieve the best result possible in the interconnected supply chain process, it is necessary to manage each link in that process in an efficient and productive manner. By determining the problems and areas of development in every stage, we create solutions that cover the entire chain. To this end, we are developing digital applications for our supply chain by closely monitoring technological developments.

This has meant that we have been using an order recommendation system since 2016. Thanks to this system, we are able to manage the store/warehouse ordering process in line with past data and in a way that reduces human error. As a result, inventory days fell from 37 days in 2015 to 31 days in 2017, while average in-stock availability ratio in the stores rose from 97.3% in 2015 to 98.6% in 2017.

We are planning to further strengthen our supply chain processes with our on-going digital projects such as Advanced Planning and Demand Forecasting, Promotion Allocation Algorithm, Improvement of Order Replenishment System and Automatic Invoice Closure.

• Promotion Allocation Algorithm

Promotion allocation algorithm allows us to distribute the promotional items we offer to our customers to our stores digitally. Our aim with this project is to improve our achievement of the two-week sales target from 70% to 80%.

• Improvement of Order Replenishment System

We aim to continue to improve the effectiveness of our Order Suggestion System and so reduce the inventory days.

• Automatic Invoice Closure

The aim of automatic invoice closure is to move away from a manual billing system to a digital one that is self-managing. The new system allows us to instantly track and report on the in-budget investment purchases and cost management in our head office, warehouses and stores. This will not only save time and effort but also help to eliminate errors. This project also allowed the automatic closure of transportation invoices.

It is extremely important to carefully monitor stock levels so that the customers who visit our stores are always able to access our full range of products.

Employee Opinion “

“As the most rapidly expanding company within the retail sector during the past two years, we have expanded our store network and now have 5,100 stores in 81 provinces. Two important actors behind this success are the good practices used in our supply chain processes and our suppliers who are inspired by our efforts, getting more and more empowered together with us and producing top quality products to meet customer expectations. As of 2017, we are working with 1,000 different suppliers.

To ensure we can offer our customers both quality and low prices, it is necessary to manage our supply chain in the most efficient manner. With this in mind, we treat our supply chain as an integrated process and strive to achieve operational excellence at every stage of this very process which requires strategic cooperation right from the manufacturer to the store. This is being done through the development of digital transformation projects to contribute to the Turkish economy by buying local products, ensure the safety of the products we offer to the customers, and increase the productivity of our activities while reducing risk.

In order to manage our supply chain in a more productive and effective manner, we established our Central Supply Unit at the end of this year. The aim of using a centralized system, rather than a warehouse based system, is to ensure the availability of the product by preserving inventory days in the supply chain management and make seasonal planning more effective. We are developing innovative solutions to improve our performance as part of our effective supply chain management.

Improvementof Order

ReplenishmentSystem

PromotionAllocationAlgorithm

AutomaticInvoiceClosure

AdvancedPlanning and

DemandForecasting

DigitalProjects

We deliver thousands of products to

OUR STORES WITH OUR EXTENSIVELOGISTICS NETWORK ON TIME.

3PEOPLE

EMPOWER

With its network extending right across Turkey, contributing to social and economic development activities is very important for Şok Marketler. We empower our society and grow stronger together through business models improving social equality to create this contribution for employees and society.

Every initiative that we conduct to improve employee satisfaction also helps to create a stronger society.

Employees by Category

96%

4%

Blue Collar White Collar

Employee Development

Retail companies need to adapt quickly to rapid changes in shopping habits caused by technological developments, our customers’ changing expectations and demands, and increases in sector competition. We believe that it is only possible through the dedication and development of our employees that we can adapt to sector innovations, advance in line with our strategic targets and produce exemplary practices.

We provide our employees with training, self-improvement and career planning opportunities based on the principles of equal opportunities and fairness. We carefully consider employee performance, experience and developed competence when conducting employee evaluations.

Performance and Career Management

We use a salary system managed by a common hierarchical structure and based on the content of the job itself. We pay an equal and competitive rate consistent with the market upon evaluating our employees’ performance through this system prepared according to annual market salary research reports. We provide our employees with fringe benefits that can vary in content based on their position.

Employees at managerial and higher positions, who work in our head office, are awarded an annual performance bonus based on the evaluation results of the Performance Management System. We also offer sales bonuses to encourage our sales team employees to demonstrate better performance. Moreover, we have recently begun an “Instant Reward” system that provides an immediate reward to recognize employees who have made a significant contribution to the company. With this system, managers can nominate a worker as a candidate for a reward. If the recommendation of the manager is accepted, then the employee is appropriately rewarded.

Goal Setting

Mid-Term Evaluation

Evaluation

The PerformanceReview System


ABOUT THE REPORT

EMPOWER INSPIRE RESTORE

ŞOK MARKETLER

It is only through effective performance management that employees can evaluate their performance and determine future goals and areas to be developed. It is for this reason that we apply the Performance Management System. This

Employees by Gender

60%

40%

Female Male

The way we are able to distinguish ourselves within this highly competitive retail industry where customer orientation stands out is intimately connected with the satisfaction of our employees - our invaluable stakeholders. We create an equal, fair, healthy and diverse working environment to ensure the happiness and satisfaction of our employees and offer training opportunities that allow employees to develop themselves in line with the qualifications sought in the sector.

Along with the growth that we experience every year, we similarly expand our human resources practices to manage our growing team in the most effective way. At Şok Marketler, we are constantly contributing to national employment and supporting the local economy through the added value that we create.

We are one big family with over 24,000 employees, who work in over 5,100 stores in 81 Turkish provinces. We are growing our family by recruiting new 4,000 employees every year.

We believe that a diverse workforce enrichens us and we are against any form of discrimination. We particularly emphasize the women’s employment so they can participate in every aspect of society. There is a balance in the proportion of male and female workers in our company. The largest increase in female employment can be seen in the number of blue collar workers. There has been a 23% increase from the previous year to 41% in 2017. Overall, there has been a 5% increase in the number of female workers to 40%.

We support women’s role in business and the women who return to work after taking a break. We provide suitable conditions for women that allow them to return to work after having children. Approximately 99% of the employees who have taken maternity leave in the last three years have returned to work at Şok.

Employees

system aims to increase employees’ motivation and competency, as well as improving employee engagement.

We apply the Performance Management System, designated by Yıldız Holding, for all head office employees, as a joint system. The employee business results are consequently evaluated in terms of targets and competency. The performance system consists of three main periods repeated every year: goal setting, mid-term evaluation and evaluation period.

During evaluations, we take into account our employees’ self-determined targets, as well as the responsibilities of the particular position. After our employees have completed their self-evaluations at the end of the year, they are also assessed by their first and second managers. The process is then complete. As a result of the evaluations, the performance of all employees is measured against company achievement quotient.

PEOPLE - EMPOWER

WE ARE BIG FAMILY AS ŞOK MARKETLER

Our family is growing with new employees every day

Leadership Development ProgramIt is important for us that our workers are satisfied with working for the company. We are also here to support their long-term and proper career plans. To this end, we offer a career journey that will allow our employees to use their potential in the most efficient manner. At Şok Marketler, such planning is dealt with holistically with the processes of performance management and training. “Human Resources Career Planning” is carried out every year for head office and branch office staff. In this way we manage to analyze our employees’ strengths and the areas they need to improve, and thus create a career map to offer data for the coming year. We implement development tools covering processes such as coaching, mentoring, class training, rotation and project responsibility that are in line with one of the Human Resources processes, namely the 70-20-10 model.In our stores, we also conduct a “Store Human Resources Planning” four times a year on a quarterly basis. Following this planning, store managers that are “likely to earn a promotion” are subject to a separate evaluation. We conclude the process after the case studies, individual presentations and question-answer sessions and identify the candidates for promotion or provide them with self-improvement plans. Thanks to this procedure the internal promotion rate of our store managers reached almost 80% in 2017.

In 2017, we began the “Tactics Here” leadership development program for field executives consisting of regional executives, regional managers and branch managers. As part of the program, regional executives received four days, regional managers three days, and branch managers six days of classroom training. The program was also further expanded to include training content for the development of eight leadership competencies contained in the set of qualifications demonstrated by field executives. In addition, branch managers were provided with one-day coaching training.

Academy Şok

Need-Based Training Sessions

We offer tailored training opportunities to our employees to enhance their professional and personal competencies and support their career development.

Our employees in our head office can also participate in catalog training sessions. Such training sessions mainly comprise of areas such as leadership, communication, presentation techniques, time management and problem solving, all of which are for social skills development. Our employees at managerial and higher positions, on the other hand, can participate in the leadership training sessions of the same catalog.

In the meantime, the team of trainers in stores we organized in 2016 has this year covered 26 of 30 of our branches. This new organization has allowed us to begin providing training on work processes for our store staff. This includes two days of orientation training for new store recruits. Thanks to the orientation training our newly hired employees do not only have an easier transition period, they are also able to learn more about our company and business operations.

Leadership Competencies

Predicting the Future Encouraging ExemplaryPerformance

Innovation Focusing on the Result

Strengthening the Team Adding Value

Matrix Leadership Celebrating the Success

1

2015 2016 2017

2

9

Number of Hours of Training per Employee

Employee Satisfaction Employee Loyalty

%65

%72 %69

%81

Employee Satisfaction Survey

2015

2017

Employee Satisfaction

We operate in a highly competitive sector and believe that we are only able to distinguish ourselves with the qualified human resources that we possess. That is why we strive for maximum employee satisfaction. We gauge employee satisfaction once every two years and learn more about employee requests and expectations. Following the results of our research, we identify areas for improvement. 77% of our employees participated in our

Occupational Health and Safety

Providing a safe and pleasant work environment is one of the most important conditions for ensuring employee satisfaction. We apply the sector specific rules of occupational health and safety within the framework of the relevant regulations and legislation. Our Group Director of Human Resources reports directly to our CEO as the most senior of the directors when it comes to occupational health and safety issues.

We identify occupational health and safety risks within our head office or stores and take the necessary precautions. Of the 9 hours of training given to each employee, in 2017, one hour of it was OHS training.

By the end of 2019, we plan to have completed the procedures for obtaining the OHSAS 18001 Occupational Health and Safety Management System certificate in order to realize OHS practices at international standards.


ABOUT THE REPORT

EMPOWER INSPIRE RESTORE

ŞOK MARKETLER

With all of the additional efforts we made, we increased the average training hours per employee from 1.6 hours to 9 hours in 2017, an almost six fold increase compared to the previous year.

I think that the most important measure Şok Marketler can take to stay ahead of the competition is to invest in employees. After all, happy employees that are loyal to their company make happy customers. It is for this reason that training sessions aimed at employee self-improvement should continue and employee satisfaction should always remain at the forefront.

Employee Opinion “

“Another one of the digitalization projects we have realized is the training utility: Academy Şok, which is an e-learning and development platform. Şok Academy, which we started as a pilot practice in 2017, helped us simultaneously support the development process of all our staff, both within the headquarters and our stores, and lay the foundations of a company culture based on the principle of “learning from each other.”

We have designed Academy Şok to act as a highly accessible and user friendly platform that knows no limits to the place and time and boasts easy and understandable content. Our employees can choose from and attend many training sessions such as store processes and basic managerial skills on this platform, which is accessible by computer, tablet and all smart mobile devices.

This platform aims to encourage the formation of a strong company culture and provide information to employees in the most rapid and appropriate manner so as to make our operational processes more effective. Following the successful piloting of the platform, it became available to all employees.

Employee Satisfaction Survey in 2017. The results of the survey show that the level of satisfaction in our company increased by 7% from 2015 to 72% in 2017, while employee loyalty increased by 12% to 81%.

4PLANETRESTORE

We see the protection of our natural capital consisting of natural resources and ecosystems as one of the most important necessities of our times for both our work and daily lives. We tend to protect natural resources while carrying out our work and restore the environmental conditions for future generations through projects aimed at energy efficiency and saving.

Today, if we are to continue with our lives and work, our most important responsibility is to protect the natural capital of the planet not only for ourselves but also for future generations. We are aware of the vital responsibility of the private sector in combatting climate change, one of the most pressing global environmental issues. As a company, we strive to manage our environmental performance in the most effective way possible by reducing our carbon footprint to make a restoring effect on the environment. Our main goals are therefore to save energy by putting an end to the unnecessary consumption of energy and reduce carbon emissions.

In order to ensure the continuity of our activities, we are developing methods of using our resources more efficiently right across our operational network. In the previous year, we started to implement our productivity projects and took significant control of our environmental impact. We are continuing to reap the fruits of our efforts. This year, despite the number of our stores rising by 30%, we have reduced carbon emissions, as compared to the previous year, by 1000 tons of CO2. We have also saved 14 million kWh of energy, equivalent to the average annual energy consumption of 1,565 houses.We are creating a system by setting targets for an effective environmental management. We are providing the necessary resources for the environmental management system to ensure continuous improvement. We aim to take actions that will ensure a more systemic reduction in our environmental impacts in the areas of energy management, packaging, waste management, recycling, efficient use of resources in our operations and distribution chain efficiency. In order to improve our environmental performance still further, we aim to apply for the ISO 14001 Environmental Management System certificate in 2019.

Environmental Impact

955

2015 2016 2017

11.263

6.063

Carbon Emission Reduction (ton CO2)

2 million

2015 2016 2017

26 million

14 million

Energy Saving (kWh)

Energy Management

We prioritize energy management to reduce our carbon footprint by managing our environmental impacts, and create economic value. These kinds of efforts first began with the review of all of our store operations.

What is important is the efficiency of all our electric equipment including air conditioners, which are vital for achieving an ideal temperature to maintain the freshness of the produce that we offer to our customers. We have focused on the correct use of the ‘sleep’ function of such equipment during the night. This was because it was determined in the preliminary evaluations that this accounts for a large part of the electricity consumed in stores. We provide energy efficiency by using it digitally. We ensure the equipment to turn itself off at night when it is not required, and for the air conditioners in stores to only operate when they are required to do so. Our aim with the automated control system is to save energy, make profit, reduce manual workload and achieve operational excellence.

Packaging and Waste Management

One important issue that needs to be considered when reducing the environmental impact of our products and services is packaging and waste management. We try to reduce the amount of materials that we use when packaging and prefer packaging that is made of environmentally friendly materials.

In addition to this, we are taking the necessary steps to reduce the use of plastic bags in our stores. As part of the “Packaging Waste Control Regulation” prepared by the Ministry of Environment and Urban Planning and expected to come into effect on the 1st January, 2019, we will be charging for our plastic bags. Within this practice included in the action plans which we have prepared, we will develop innovative solutions and contribute to the fight against preventing environmental pollution.

Energy Efficiency on the Shelves of Dairy Products

The energy efficiency project is a transformation project which aims to transform the systems and carry out efficiency-oriented maintenance in product aisles to ensure energy efficiency in our stores. Our pilot project aims to enable the compressors to work less and allow us to keep the cooled air inside the section which in return will reduce the strain on the central cooling system. In addition, we further aim to reduce energy consumption by replacing florescent lighting in refrigerated sections with LED lights. We expect this practice tested in 12 stores to reduce carbon emissions by 6,600 tons of CO2 and result in an energy saving of 23%.

Total Loss Prevention Committee

We aim to recover our losses arising from our products and services in the business processes where our top priority is operational excellence. We have therefore formed the Total Loss Prevention Committee to take all kinds of preventive actions regarding losses and disposals and to keep such things under control. These efforts are closely followed up by holding monthly meetings attended by the CEO, the CFO, the Human Resources Group Director and the Loss Prevention Manager.

We have also made changes within the organization to systematically control the problem of total losses. Loss Prevention Managers who have been assigned to certain warehouses and the Inventory and Stock Control Unit working under the Audit Directorate report to the Loss Prevention Directorate on such issues.


ABOUT THE REPORT

INSPIRE RESTOREEMPOWER

ŞOK MARKETLER

Today, if we are to continue with our lives and work, our most important responsibility is to protect the natural capital of the planet not only for ourselves but also for future generations “

“PLANET - RESTORE

Performance Indicators And GRI Content Index

28 2017 SUSTAINABILITY REPORT 29ŞOK MARKETLER

Social Performance Indicators

*The data of Şok Marketler A.Ş., Mevsim Taze Sebze Meyve Sanayi ve Ticaret A.Ş., Teközel Gıda Temizlik Sağlık Marka Hizmetleri Sanayi ve Ticaret A.Ş., UCZ Mağazacılık Ticaret A.Ş. are included.

Number of Employees by Employment Duration

0-5 Years

5-10 Years

10+ Years

2015 2016 2017

Female

4.141

728

163

Male

6.365

1.259

291

Male

6.032

580

131

Male

10.867

1090

231

Female

9.072

507

121

Male

13.290

998

267


Number of Employees by Regions

Mediterranean

Central Anatolia

Marmara

Aegean

Black Sea

Southeastern Anatolia

Eastern Anatolia

Total*

2015

2,809

1,237

5,000

1,937

1,182

289

493

12,947

2016

3,554

2,233

7,216

2,658

1,972

739

559

18,931

2017

4,405

3,223

8,951

3,259

2,646

1,120

651

24,255

Ratio of Employees by Age

18-25 Years Old

26-30 Years Old

31-40 Years Old

41+

%48

%27

%22

%3

2017


Number of Employees by Gender

Employees

Total*

2015

12,947

2016 2017

Female

5,032

Male

7,915

18,931

Female

6,743

Male

12,188

24,255

Female

9,700

Male

14,555

Number of Employees on Parental Leave and back from Parental Leave by Gender

Number of Employees on Parental Leave

Number of Employees Returning to Work After Parental Leave

2015 2016 2017

Female

513

505

Male

0

0

Female

707

698

Male

0

0

Female

947

936

Male

0

0

Number of New Employees by Gender and Age

Under 30 Years Old

Between 31-49 Years Old

Over 50 Years Old

Total Number of New Employees

2015 2016 2017

Female

4.947

556

0

5.503

Male

7.618

770

19

8.407

Female

5.350

711

1

6.062

Male

9.881

1.547

23

11.451

Female

8.963

1.270

0

10.233

Male

12.331

2.079

28

14.438


Number of Employees by Employment Category

Full Time

Part Time

Total*

2015 2016 2017

12,903

44

12,947

18.879

52

18.931

24.153

102

24.255

Number of Employees Subjected to Performance Evaluation

2015 2016 2017

482 432 920

2015 2016 2017Employee Trainings

Total Training Hours

Total OHS Training Hours

14.433

4.755

27.451

6.855

207.423

9.411

GRI Content Index


GRI Standard Disclosure Page number(s) and/or URL(s)

GRI 101: Foundation 2016 General Disclosures

Material Topics

GRI 200 Economic Standard SeriesEconomic Performance

GRI 102: General

Disclosures 2016

Organizational Profile

102-1 4

102-2 4

102-3 https://www.sokmarket.com.tr/ iletisim/adres-bilgileri

102-4 4

102-5 https://sokmarketyatirimciiliskileri.com/ tr/hisse-bilgileri

102-6 4, 5

102-7 4, 5

102-8 28, 29

102-9 16, 17

102-10 There are no significant changes.

102-11 6, 7

102-12 9

102-13 9

102-18 7

102-19 7

102-20 7

102-21 8, 9

102-22 6, 7

102-23 6, 7

102-24 6, 7

102-25 6, 7

102-35 https://sokmarketyatirimciiliskileri.com/ tr/ucretlendirme-politikasi

Strategy

102-14 1

Ethics and Integrity

102-16 4

Governance

GRI 102: General

Disclosures 2016

GRI 103: Management

Approach 2016

GRI 201: Economic

Performance 2016

Stakeholder Engagement

102-40 9

102-41 Any employees are covered by collective bargaining agreements.

102-42 8, 9

102-43 9

102-44 8, 9

Reporting Practice

102-45 4

102-46 4, 8, 9

102-47 8, 9

102-48 2017 Sustainability Report is the first sustainability report of Şok Marketler.


102-50 1 January 2017 - 31 December 2017


102-52 4

102-53 4

102-54 4

102-55 30, 31

102-56 No external assurance is received.

Omission GRI Standard Disclosure Page number(s) and/or URL(s) Omission

103-1 3, 4, 5 -

103-2 -103-3 -

201-1 https://www.sokmarketyatirimci iliskileri.com/images/PDFs/HalkaArz/ HalkaArz-SPKOnayliIzahname.pdf 201-3 https://www.sokmarketyatirimci iliskileri.com/images/PDFs/HalkaArz/ HalkaArz-SPKOnayliIzahname.pdf

-


Procurement Practices103-1 16

103-2 16 103-3 16

204-1 16

Occupational Health and Safety

GRI 103: Management

Approach 2016

GRI 403: Occupational

Health and Safety 2016

103-1 23 103-2 23 103-3 23 403-1 23 403-5 23, 29 403-8 23

Training and Education

GRI 103: Management

Approach 2016

GRI 404: Training and

Education 2016

103-1 20-23

103-2 20-23 103-3 20-23

404-1 23, 29 404-2 20-23 404-3 20-23

Customer Health and Safety

103-1 12 103-2 12 103-3 12

416-1 12 Emissions

103-1 26, 27 103-2 26, 27

103-3 26, 27

305-5 26

Supplier Environmental Assessment

103-1 12

103-2 12

103-3 12

308-1 12

GRI 300 Environmental Standards Series Energy

GRI 103: Management

Approach 2016

GRI 302: Energy 2016

103-1 26, 27 103-2 26, 27 103-3 26, 27 302-1 26

302-4 26

GRI 400 Social Standards Series

Employment

GRI 103: Management

Approach 2016

GRI 401: Employment 2016

103-1 20, 21 103-2 20, 21 103-3 20, 21 401-1 29 401-3 29

Topics That Are Not Covered in Standards Digitalization

GRI 103: Management

Approach 2016

103-1 8 103-2 8 103-3 8

Marketing and Labeling

103-1 12 103-2 12

103-3 12

416-1 12

Responsible Products and Fair Trade

GRI 103: Management

Approach 2016

103-1 12, 16, 17 103-2 12, 16, 17 103-3 12, 16, 17

Customer Experience

GRI 103: Management

Approach 2016

103-1 13-15 103-2 13-15 103-3 13-15

GRI Standard Disclosure Page number(s) and/or URL(s) Omission GRI Standard Disclosure Page number(s) and/or URL(s) Omission

GRI 103: Management

Approach 2016

GRI 305:Emissions 2016

GRI 103: Management

Approach 2016

GRI 308: Supplier Environmental

Assessment 2016

GRI 103: Management

Approach 2016

GRI 417: Marketing and Labeling 2016

GRI 103: Management

Approach 2016

GRI 416: Customer Health and Safety 2016

GRI Standard Disclosure Page number(s) and/or URL(s) Omission

GRI 103: Management

Approach 2016

GRI 204: Procurement Practices 2016

Date post:	02-Aug-2020
Category:	Documents
Upload:	others
View:	0 times
Download:	0 times

REPORT · 2019-07-05 · Workñg Prñc˜ples des˜gnated under the roof of Yıldız Holdñg ñ...

Documents