Crisis and cascading closures in the catering sector

Crisis and cascading closures in the catering sector
Crisis and cascading closures in the catering sector

High taxes, tax audits, excessive fines, excessive fees and heavy social charges, exacerbated by the Covid-19 crisis, have seriously affected the restaurant and cafe sector. The proliferation of mobile cafes intensifies the already tough competition, according to professionals. This difficult situation leads to the continued closure of catering establishments and cafes. In the Casablanca-Settat region alone, around 8,964 establishments closed, resulting in the loss of around 53,800 jobs.

The National Association of Cafés and Restaurants in Morocco (ANPCRM) is sounding the alarm regarding the chain closures affecting the restaurant and café sectors. In the Casablanca-Settat region, around 8,964 establishments have already ceased their activities, with a loss of around 53,800 jobs. A similar trend is observed in the regions of Rabat-Salé-Kénitra and Fès-Meknes, according to ANPCRM data. For the first, the number of closed establishments amounts to 4,769 units, including 874 before 2023.

The cancellation of the remaining penalties and fines due to the CNSS and the renegotiation of the principal of the debt over a period adapted to the repayment capacity of professionals are requested. Likewise, a contribution from the State to cover 50% of contributions is requested.

The increase in ingredient prices, particularly coffee, is worsening the sector’s crisis. The market for this raw material is experiencing a sharp rise in prices, with an initial increase of more than 30%, according to ANPCRM. This inflation has pushed some café owners and managers to consider increasing the price of coffee, a practice deemed illegal by the Competition Council.

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Faced with an unprecedented crisis in the catering sector in Morocco, an alarm signal is being raised. Figures from the Casablanca regional conference indicate an exponential increase in the number of establishment closures and layoffs, plunging the sector into alarming instability.

The National Federation of Café and Restaurant Owners in Morocco (FNPCRM) presents a worrying assessment, with figures which attest to the rapid deterioration of the situation. A field study carried out by the Federation reveals massive business closures, an exponential increase in layoffs and institutional instability harmful to the sustainability of establishments.

During the Federation’s regional conference in Casablanca, the number of workers laid off in cafes and restaurants exceeded 11,220 in 2023 in the Casablanca-Settat region. This region recorded the closure of 8,964 cafes in 2023, an alarming figure compared to the 1,870 closures in 2022. In the Rabat-Salé-Kénitra region, the number of workers laid off in the sector in 2023 rose to 28,614, against 5,244 in 2022.

High taxes, tax controls, abusive fines, excessive fees and heavy social charges, as well as the Covid-19 crisis, have strongly impacted the Moroccan economy and, consequently, the restaurant and cafe sector , with the proliferation of mobile cafes which exacerbate fierce competition, say professionals.

These grievances aim to save an essential sector of the Moroccan economy and preserve threatened jobs. The emergency meeting requested by the Federation could provide a platform to discuss strategic solutions to restore the lost balance in the sector and revive the vital economic activity of cafes and restaurants in Morocco.

According to the FNPCRM, 13,000 cafes and restaurants went bankrupt in 2023, bringing the total of businesses that have had to cease their activities since the Covid-19 crisis to 16,413. Thousands of workers found themselves unemployed. In the Casablanca-Settat region, 7,094 units closed in 2023, resulting in the loss of 42,564 jobs.

These closures represent 53% of all closures recorded in the region since the pandemic, in addition to a further 1,870 recorded at the end of 2022, which resulted in the loss of 11,220 jobs. Cafe owners and restaurateurs in the Rabat-Salé-Kénitra region are not spared from this crisis. According to the national federation, nearly 5,000 companies in the sector ceased their activities at the end of 2023, leading to the loss of 23,382 jobs during the same period.

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