Inflation in Tunisia: how to protect your SME's margins

Your purchase prices have gone up. Your selling prices, far less. Between the two, the margin narrows — usually without anyone noticing before the year-end close. In Tunisia, inflation has been slowing for three months but is still very much there: 5.1% in July 2026 according to the INS, and 6.6% on food. At the same time, private-sector wages are rising by around 5% a year under the 2026-2028 reform. Here is how to measure that erosion, then stop it.

Where inflation stands in Tunisia

According to the National Institute of Statistics (INS), the inflation rate stands at 5.1% in July 2026. That is the third consecutive month of decline: the indicator was at 5.5% in May and 5.3% in June. The “Food and beverages” group remains the most dynamic, up 6.6% in July, after 7.1% the previous month. Core inflation, which excludes food and energy and therefore reflects the underlying price trend, comes in at 4.8%.

These figures call for a careful reading. Inflation slowing down does not mean prices are falling: they keep rising, just a little more slowly. The level already reached is here to stay. A company that has not revised its price list for eighteen months is therefore carrying the accumulation of all those successive increases.

On top of this pressure on purchasing comes pressure on payroll costs. The decrees of the 2026-2028 wage reform were published in the JORT on 30 April 2026, with retroactive effect to 1 January 2026, and provide for an increase of around 5% per year in private-sector collective agreements. In other words: the two main cost items of an SME — purchases and wages — are rising at the same time.

For a business, the problem is not inflation itself. The problem is the speed gap between cost increases, which are immediate and imposed, and selling-price increases, which are late and negotiated.

Why inflation eats into margin without being seen

Many business owners discover the deterioration of their margin at the annual close, even though turnover has grown. Three mechanisms explain this gap — and they compound one another.

1. The gap between when you buy and when you sell

A supplier revises its prices whenever it decides to, sometimes several times a year. An SME revises its price list once or twice a year, often in January, and hesitates to touch it mid-year for fear of upsetting its customers. Between two revisions, every increase in purchase prices is absorbed in full by the margin.

2. Old stock that hides the true cost

This is the most insidious trap. As long as you are selling an item bought six months ago, your accounts show a margin calculated on the old purchase price — a flattering one. But to rebuild that stock, you will have to pay today's price. The accounting margin is correct; the economic margin, the one that determines your ability to buy again, is already much lower. An SME can thus sell at a loss while believing it is making money. This is why an up-to-date inventory valuation is not a purely accounting matter, but a commercial one.

3. Discounts granted on a price list already under strain

Discounts are often set once and for all: “this customer gets 8%”. When the purchase cost rises by 10% and the price list does not move, those 8% are no longer taken from a comfortable margin but from an already squeezed one. A discount that represented a third of the margin can represent half of it a few months later — without any decision having been taken.

Calculating your real margin, product by product

You only protect what you measure. Yet many SMEs still think in terms of a global annual margin, which is an average — and an average always hides items that no longer earn anything.

Three concepts are enough to steer by:

• Gross margin: selling price excluding tax minus purchase cost excluding tax. It is an amount, in dinars.
• The markup rate: gross margin divided by the selling price. This is the indicator to favour when comparing items with one another and tracking erosion over time.
• The margin rate: gross margin divided by the purchase cost. This is the one used to set a price from a cost. Confusing the two leads to systematic under-pricing.

Above all, the cost to use is not the one on the supplier invoice. The cost price includes transport, handling, packaging, breakage and — when payment terms lengthen — the cost of customer credit. Take an illustrative example, on an item whose purchase price has risen by 12%:

Item (in TND, illustrative example)	Initial situation	After the cost increase
Purchase price excl. tax	100.000	112.000
+ Transport and handling	4.000	5.000
+ Packaging and breakage	2.000	2.000
= Cost price	106.000	119.000
Catalogue selling price excl. tax	140.000	145.000
− Average discount granted (5%)	7.000	7.250
= Net selling price	133.000	137.750
Gross margin	27.000	18.750
Markup rate	20.3%	13.6%

The price list was indeed raised — by 5 TND, i.e. 3.6%. And yet the margin melts by more than a quarter, and the markup rate loses nearly seven points: a real price increase, but too small compared with the rise in costs. Without an item-by-item calculation, the phenomenon stays invisible.

Seven levers to protect your margin

Once measurement is in place, action breaks down into seven areas, from the quickest to the most structural.

1. Revise prices by segment, not uniformly. A blanket 5% increase across the whole catalogue is the worst possible choice: too much on loss leaders exposed to competition, too little on technical products where the customer is barely price-sensitive. Classify your items by price sensitivity, then differentiate.
2. Renegotiate purchasing, including beyond unit price. A supplier that cannot lower its price will often agree to a volume discount tier, free shipping, a longer payment term or more economical packaging — all of which weigh on the cost price.
3. Review payment terms in both directions. A customer payment term that keeps lengthening is an additional financing cost. A well-calibrated early-payment discount often costs less than an overdraft — this is a trade-off to make explicitly, and it ties in directly with the challenges of cash flow control.
4. Watch slow-moving items. Dormant stock is doubly penalising: it ties up cash that has become more expensive, and its relative value deteriorates. Clear these references before they turn into outright losses — this is one of the costliest inventory management mistakes.
5. Take back control of discounts. Set a ceiling per product family and require approval beyond it. Many SMEs discover, once they measure, that the discount actually granted far exceeds the theoretical one: every sales rep rounds in the customer's favour.
6. Index long contracts. Any commitment longer than six months — framework contract, tender, subscription — should include a revision clause. Negotiated at signature, it goes through without difficulty; demanded mid-contract, it turns into a conflict.
7. Track margin continuously. This is the lever that makes the other six possible. Without monthly tracking by item and by customer, decisions are taken on gut feeling, a year too late.

Passing on an increase without losing your customers

This is the fear that paralyses most business owners: raising prices means risking the loss of a customer. In practice, the way you announce it matters more than the amount.

Warn rather than surprise

An increase announced in advance, with a clear effective date, goes down far better than one discovered on an invoice. Three to four weeks' notice gives the customer time to get organised, or even to place one last order at the old price — which improves your cash position for the month.

Justify with facts, not generalities

“Everything is going up” is not an argument. “The cost of our raw material has risen by X% since January and we are absorbing part of it” is one. Citing a public source — the INS price index — depersonalises the discussion: it is no longer your decision, it is a shared observation.

Phase it and segment it

Two 3% increases six months apart go down better than a single 6% increase. And not all customers are equal: a long-standing, high-volume customer who pays on time deserves different treatment from an occasional, demanding customer who settles sixty days late. Structured sales tracking makes that distinction objective instead of something you simply endure.

Offer something in return

When an increase goes down badly, offer an alternative: different packaging, an equivalent, less expensive reference, a volume commitment in exchange for a preserved price. The customer keeps a choice, and the relationship is preserved.

What an ERP changes

These methods can be practised on a spreadsheet, and that is a good start. The limit appears quickly: the spreadsheet does not know the last price invoiced by the supplier, everything has to be re-entered, and the file is already out of date the day you open it. On a catalogue of several hundred references, the exercise becomes impractical.

An integrated management system changes three concrete things:

• Margin is calculated automatically, by item, by customer and by family, because purchase price, selling price, discount and tax all live in the same system. The calculation in the table above becomes a simple dashboard column.
• Purchase price history is kept. You can see when a supplier raised its prices, by how much, and whether the increase was passed on. It is also the factual basis for renegotiating purchasing and supply.
• Alerts replace manual monitoring. A minimum margin threshold per family, a gap between catalogue price and price actually applied, a discount above the authorised ceiling: the system flags the anomaly the moment it occurs.

That is the role of Swifto's dashboards and indicators, which aggregate sales, purchasing and stock to give a continuous read on profitability. A business intelligence approach applied to the SME does not produce more reports: it shortens the delay between the moment margin deteriorates and the moment you find out. In a period of inflation, that delay is what separates an adjustment from a loss.

One point should not be overlooked: the reliability of your base data. An accurate cost price assumes correctly entered purchase invoices and invoicing compliant with Tunisian rules — VAT, fiscal stamp, withholding tax. Without that rigour upstream, every margin indicator downstream is wrong.

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