By Oxford Business Group
Morocco’s retail sector is set to undergo a major shift in the coming years as large-scale purpose-built retail areas become more prevalent but moves away from traditional small-scale shops to massive retail malls may be slowed by incremental growth in consumer spending.
The retail sector is a major contributor to the economy, representing around 12.8 percent of GDP and providing employment to some 1m people, approximately 13 percent of the total workforce.
Although large segments of the sector, notably grocery retailing, are still concentrated in smaller outlets such as corner shops, there is an increasing trend for shoppers in urban areas to make use of hypermarkets, particularly as a major new development improves regional coverage.
One of the highest-profile projects is the Morocco Mall, set to open its doors early next year. Located on the corniche of Casablanca, the shopping centre has a floor area of 200,000 sq meters, making it the largest retail outlet on the continent outside of South Africa. The developer and owner, the local Aksal Group, hopes the $250m centre will have footfall of 15m or more a year.
The mall is scheduled to have more than 250 shops and food outlets, and also feature a large aquarium and an IMAX cinema. The headline tenant is to be up market French department store Galeriés Lafayette, which has signed up to take a 15,000 sq meter, three-storey placement in the complex. As of the end of August, 85 percent of all retail space had been leased, with Aksal officials confident the remainder would be taken up by the time the mall opened.
According to Philippe de Fraiteur, director of strategy and development for Aksal Group, most of the work on the project has been completed with the retailers now in the process of fitting out, preparing and staffing their premises. The official opening of Morocco Mall is scheduled for February 2011, de Fraiteur told local media.
Morocco’s economy has been predicted to expand by 4.5 percent next year, with growth for 2010 projected to come in at around 3.2 percent.
Though not spectacular, this steady rise in GDP should encourage retailers, as should the slow but sure improvement in consumer sentiment over the past year or so.
A number of reports have shown consumer confidence on the rise. A recent study conducted by online employment and career agency Bayt, in conjunction with international survey firm YouGov, found that almost 50 percent of those questioned in Morocco were strongly optimistic about the future of the country’s economy, while just 11 percent felt there would be a worsening over the next year. Just as importantly for retailers, an increasing number had a positive outlook over their personal financial situation, with 43 percent saying in September they had higher expectations for the next 12 months.
However, one encouraging factor is the strong performance of Morocco’s tourism industry, which has a direct impact on the retail sector. While geared to the domestic market, the Morocco Mall will likely appeal to increasingly significant segment of foreign visitors. According to Tourism and Handicrafts Minister Yassir Znagui, speaking during a visit to the US in early November, tourist arrivals will be up 14 percent this year, following on from a 6 percent rise in 2009.
