Soaring profit margins across the country’s retailers are driving sharp increases in consumer prices, according to a newly released report by Morocco’s Competition Council.
The in-depth 2025 analysis centers on how structural inefficiencies, opaque pricing practices, and aggressive markups, especially in large-scale retail chains, have squeezed Moroccan households during one of the toughest inflationary periods in decades.
“The profit margin buildup across distribution channels directly feeds food price inflation,” the report warns.
Distributors Take Bigger Cuts Than Ever
The Competition Council flags a disturbing trend: distributors, particularly in the modern retail sector, are taking increasingly larger gross profit margins on essential items like milk, butter, pasta, and canned goods. In some cases, the markup nearly doubles between factory and shelf, eroding affordability for average consumers.
The profit margin on milk rose from 10% in 2021 to 22% in 2023, according to the report. This “gross margin inflation”, as described by council analysts, reflects strategic profit-taking amid “weak regulatory oversight.”
The report uncovers a growing reliance on “back margins” – off-invoice bonuses that large retailers demand from suppliers in exchange for shelf space or visibility. These hidden costs rarely show up in official pricing but ultimately trickle down to shoppers. Profit margins on this type of retailing can reach up to 9%.
Retailers use these back-end deals as bargaining chips to bolster their earnings without technically raising shelf prices. But the end result is the same: consumers pay more.
“Large retailers are increasingly shifting the weight of promotional costs and trade deals onto producers, forcing them to raise prices to survive,” the council notes.
Complex Supply Chains, Weak Oversight
The council criticizes Morocco’s food supply chain structure as “long, complex, and lightly regulated.” It argues that these characteristics make it easy for profit-padding to go unchecked, especially in sectors where traditional and modern retail overlap.
The council also highlights how fragmented governance and a lack of market transparency make it difficult for consumers and regulators to know when they overpay.
From 2022 to 2023, food prices surged by 11% to 12.5%, far outpacing inflation in non-food sectors. The report ties this jump not only to global supply shocks and climate issues but to domestic practices that artificially inflate prices.
As households struggle to keep up with rising grocery bills, the Competition Council says now is the time to take a hard look at how margins are formed and who profits most.
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