Interview: Zouhair Bennani
What is the potential for mass distribution?
ZOUHAIR BENNANI: As of today, mass distribution represents only 15% of retail in Morocco while, for example, it accounts for 25% in Tunisia and 32% in Turkey. In Europe, mass distribution averages 70% of the retail sector. Therefore, the development of retail in Morocco has great potential. Furthermore, the government launched a 10-year plan, RAWAJ, for retail modernisation. Nonetheless, I believe that several issues have not yet been considered by RAWAJ, including the availability of land and urban commercial areas, as well as the training of qualified and specialised labour.
Can you describe some of the major changes happening to Moroccan consumers’ habits?
BENNANI: Recently, we have observed important changes in local consumers' food habits, thanks in part to modern food distribution. We can see, for example, an impressive increase in the consumption of fresh products in modern distribution. Indeed, it has served as a driver for several products. White meat that had traditionally been purchased in traditional markets has recently arrived on modern store shelves under a variety of brands. In addition, frozen products were almost non-existent in the consumer’s basket prior to the expansion of modern distribution. More products, as well as more choice and competition in the market, have led Moroccan consumers to be more careful about price and quality than they were a few years ago.
What important challenges face the retail sector?
BENNANI: The most significant challenges are access to land, the fight against smuggling and the informal sector, and the lack of qualified labour. As far as access to land is concerned, commercial areas should be developed that are specific to different locations: large malls and retail parks in suburban areas, and small and medium-sized stores in the middle of cities. I also think that the government, following foreign models, could provide retail parks with spacious premises that could be rented out to retailers. It would be an efficient way to boost job creation as well as the profitability of real estate. Another issue with commercial projects is that real estate developers mostly focus on short-term profitability and prefer to offer many small stores for sale instead of larger facilities for rent. However, certain developers have adopted a long-term vision and are offering convenient commercial spaces, with complementary offerings between small and larger areas.
With regards to the informal sector, illegal sellers hire off-book employees who do not pay taxes, and therefore do not contribute to our economic development. Indeed, this is often related to other challenges such as smuggling, which has undermined several sectors of the economy, including food products, cultural products, electronic goods, and fuels and lubricants, among others. The population’s purchasing power, which remains generally weak, is an important driver of these problems. Smugglers propose products – often deficient – at a competitive price compared to official and legal merchandising. This leads to a vicious cycle that must be broken through strengthened controls.
Finally, there are many missing skills in the labour market, whether in food-related jobs, such as butchers or bakers, or occupations related to resources management, stock management and technology. We need to start training the younger generation to be more competitive, both locally and internationally.
What is the future for franchises in Morocco?
BENNANI: In my opinion, the franchise business model has proven to be a success in Morocco. These models import know-how that has been effective in other developing countries and also have a bright future here. Today, traditional retail comprises 85% of total industry. Franchises can raise standards and improve norms among players in the traditional segment, making it more competitive and assisting the ongoing modernisation of the market. Morocco has a great game field for investors; now we just need the right players.
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