Morocco’s retail crisis causes global franchises to close
Morocco’s retail sector is in crisis due to continuous rises in franchising costs,Covid-19, import tariffs, and customs policy. According to Telquel on January 16th Moroccan shopping centres visually highlight this impact, with closed shutters and empty storefronts reflecting the withdrawal of various international franchises. The latest names to leave the Al Massira boulevard in Casablanca includes H&M, Terranova, and New Yorker.
The Moroccan Federation of Network Commerce (FMRC) has stated “several hundred stores closed last year, with about a dozen brands withdrawing from the country.” They have warned that these closures will continue and become more frequent, if no measures are taken to support the sector.
Retail and fashion have been so significantly hit due to the fact that the middle classes purchasing power are the most hard-hit during times of inflation and recession, as they forego items such as new clothes in favour of necessities. Families who previously shopped multiple times a month may now only shop a handful of times a year.
The most recent data from the High Commission for planning reports a 4% decrease in household purchasing power since 2022.Another key factor has been an increase in import tariffs, when the Moroccan minister of finance raised customs duties by 5% on all imported products from non-trade agreement countries.
Similarly, since 2019 Moroccan policymakers have sought to promote made in Morocco items, in recent years instating increasingly strict border controls. Retailers have reported an unjustified complexity of procedures and a rise in inspection costs mandated by importers, both of which have increased since the 2019 initiative. International brands have become reluctant to expand to Morocco due to the costs associated with this.
Telquel
