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Morocco: Souks face competition from supermarkets

Monday, 04 April 2011 12:56

Morocco_Super_market_Maroc_Un_super_march

Souks face increasing competition from supermarkets as private firms – both domestic and foreign – plan openings and expansions in Morocco , changing the nature of the marketplace, Global Arab Network reports according to OBG.

The supermarket segment is currently dominated by local players, but foreign firms are showing increasing interest and appear set to help drive expansion. In March Turkish no-frills low-cost supermarket chain BIM announced plans to almost double the size of its existing store network in Morocco, from the current 45 to 80. It reportedly has plans to further expand to 150 stores by the end of 2012. The discount retailer entered Morocco in 2008 and all of its current stores are located in Casablanca and the surrounding areas, meaning there is ample room for the company to expand in Morocco.

Low-cost chains such as BIM, which sell discounted bulk items, are well-placed to succeed in Morocco, where 51% of people buy groceries in large quantities to save money, according to a survey published by Moroccan business news weekly La Vie Eco in January.

BIM’s expansion plans would make it one of the largest players in the country in terms of outlets, though, given the size of its stores, not in terms of total floor space. Other major companies in the sector include the locally owned Hanouty group, which runs a chain of convenience stores, and Marjane Holding, which is currently the largest player in the supermarket segment in terms of both outlets and floor space with a network of 52 stores.

Marjane’s stores include its 21 own-brand hypermarkets located on the outskirts of urban areas, which have a combined floor space of around 140,000 sq metres and currently dominate the hypermarket segment, as well as its 31 Acima supermarkets, a chain of smaller stores usually found in town centres. While local conglomerate ONA-SNI currently has a 100% stake in Marjane Holding, it reportedly intends to reduce its interest in the firm later this year as part of plans to lower its ownership levels in some of its subsidiaries.

While there is growing foreign interest in Moroccan mass retail, local companies are also increasing their clout in the sector. In November last year, locally owned supermarket chain Label’Vie acquired the local outlets of the Metro wholesale chain from Germany’s Metro Cash and Carry. Label’Vie, in addition to operating a chain of 18 stores under its own name, also operates two Carrefour-branded hypermarkets under a franchise agreement with the French retail major. The company plans to transform its newly acquired Metro stores into Carrefour-branded hypermarkets over the course of the coming two years, rebranding four this year and the remaining four in 2012.

Locally owned Aswak Assalam is another of Marjane’s competitors that is expanding its supermarket and hypermarket network. The chain, which is owned by Ynna Holding currently operates 11 outlets across the country and intends to open an average of two additional stores a year.

In September it announced plans to invest Dh270m (€24.6m) in the construction of a combined hypermarket and shopping mall complex at site of the former Casablanca wholesale market, which will be known as Aswak Assalam Belvedere. The project will include a 5000-sq-metre branch of Aswak Assalam as well as a 5500-sq-metre shopping centre, spread over three floors and including restaurants and a bowling alley. The complex is due to open later this year. Meanwhile the aforementioned Hanouty, largely active in the convenience store segment, has plans to increase its supermarket presence and has already opened a 700-sq-metre facility in Marrakech.

Outside of supermarkets and hypermarkets, foreign firms – many of them French – are displaying increasing interest in opening branches and franchises in the country. For example, Galeries Lafayette is due to open a 10,000-sq-metre facility, its first in Morocco, at the Morocco Mall on Casablanca’s corniche. Fnac, the French electronics, book and audio-visual retailer, will also have an outlet there. The mall was due to open earlier this year but its inauguration has been postponed until September.

In February 2011, French home improvement chain Mr Bricolage opened its third store in Morocco, a 2800-sq-metre outlet in Tangier located adjacent to an existing Marjane hypermarket. The firm already has branches in Casablanca and Marrakech and also plans to open a fourth store in Agadir. Moroccan investors are also planning to open franchises of French organic and health food store La Vie Claire, with the first due to open in March in the California district of Casablanca and plans for two more stores in Rabat and Casablanca further down the line.

The government is supporting the pursuit of large-scale shopping facilities. The Rawaj plan, launched in 2008, aims to treble large-scale retail capacity by 2020. Some 56 large-scale retail outlets are due to open by 2012 alone, with the country boasting 600 such facilities by 2020.

While most Moroccans still head to traditional souks, markets and smaller neighbourhood stores to shop, the expansion of large-scale, modern retail outlets will likely result in a gradual change in habits in the years to come. With backing from the government in the form of the Rawaj plan and growing investment from both local and foreign players alike, the country’s shoppers look set to benefit from lower prices and greater choice on store shelves.

Global Arab Network

This article is published in partnership with Oxford Business Group

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Last Updated on Monday, 04 April 2011 13:17

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