Slowing inflation brings chances to grow in Morocco

Morocco’s FMCG market struggled to return to normal in 2023, with the profound changes driven by the pandemic and high inflation persisting. Worldpanel’s full-year report shows that despite an improvement in the country’s economic situation, consumers’ confidence continued to decline through the year, and they purchased less FMCG than they did in 2022.

However, data for Q4 2023 shows an increase in volume consumption, providing reasons for optimism at last. Inflation has been dropping continuously since February – although at 2.2%, this is still double the pre-2022 level – making it easier for households to gain control over their budgets once again. As a result, purchase volume and consumer confidence are both trending upwards.

Rationalisation remains

Due to rising FMCG prices, and the corresponding increase in spend, Moroccans have had to compensate by buying fewer packs. This is still the case across the majority of categories, with half declining in volume over 2023, and just 24% growing. Personal care, home care, and dairy were hit particularly hard.

The performance of almost all dairy categories was impacted last year, with only fresh cheese managing to increase both volume and penetration, gaining 5.5% more households in 2023. Volume sales of personal and home care products have been sliding since the pandemic, and every category in these sectors has suffered: not one managed to grow its volume in 2023.

Certain personal care brands have illustrated that it’s still possible to find opportunities to grow in a declining category, however. Among those increasing their sales volume were toilet soap brands Taous (13%), Chapo (+23%) and El-Warda (34%), Herbal Essences shampoo (+5%), toothpaste brands CloseUp (+13%) and DoctorDent (+5%), and feminine care brand Mia (+16%).                                    

Winners and losers in food and beverages

At the close of 2023, price inflation in the food and beverage sectors stood at 4.3%. Prices remain high in some categories, with the steepest year-on-year increases in chocolate confectionery (+34%), ready-to-eat desserts (+24%) and milk (+19%). However, the slowing rate of inflation is having an effect on consumer behaviour. While households are still cautious in their consumption of oil, for example, they’re purchasing more in other categories such as chocolate spreads.

There has been a big change A shift is operating in the consumption of beverages, with hot drinks being chosen less often by Moroccan shoppers. Carbonated soft drinks (CSD) and fruit juices are the winners, increasing value and purchase frequency by tempting consumers to switch from other categories thanks to successful innovation, communication, and price control.

BIM is the star performer

The largest discount grocery retailer in Morocco, BIM has grown its presence across the country by successfully recruiting new shoppers from other channels and increasing purchase frequency. It is rapidly expanding its number of stores nationwide.

With lower prices than the hypermarket chain Marjane and supermarket chain Carrefour, BIM’s concept sits between modern trade in terms of experience, and grocery stores in its convenience and practicality. The retailer’s increasing popularity is country-wide, with particular strength in semi-rural areas, and with smaller and younger households and middle class consumers.

The majority of FMCG categories are growing within BIM, but performance is especially high in milk, deodorants, paper towels, CSD and spoonable yogurts. However, its rivals in the modern trade channel are fighting back back by developing new concepts.

Gradually, consumer behaviour in Morocco is stabilising, and the volume-value gap has started to reduce. During the first quarter of 2024, things took a positive turn. But the picture is not altogether straightforward: unemployment is set to rise this year compared to 2023, for instance. This means it’s vital for brands and retailers to stay abreast of the decisions shoppers are making.

Worldpanel’s consumer panel in Morocco covers more than 40 categories, across all channels: hypermarkets and supermarkets, grocery stores, souks, pharmacies, cleaning shops, and online platforms. If you would like further insights, fill in the form at the right side of this page to download a presentation and contact our experts.