Venezuela orders stores to get into Christmas spirit
Mandatory ‘sales’ pushing retailers to the brink of bankruptcy
Ever since Venezuelan government agents put up a giant “Sale” sign in his storefront, crowds have been lining up outside Juan Vieira’s shoe shop. But he’s having a hard time getting into the Christmas spirit. “What good is it to sell shoes if I’m giving away my product?”
Stuck in a nasty economic crisis, Venezuela is facing a Scrooge-worthy Christmas this year. The world’s highest inflation rate has gutted Venezuelans’ incomes and chronic shortages have left them struggling to buy food, let alone presents. Seeking to spread some cheer, President Nicolas Maduro’s socialist government has set aside its distaste for consumerism and sent a small army of bureaucrats and soldiers to force more than 200 retail stores in Caracas to hold Christmas sales.
“Our worker-president has ordered us to guarantee fair prices for the people, and we are complying. These economic hitmen can’t take away our merry Christmas,” said William Contreras, head of the National Superintendency for the Defense of Socioeconomic Rights, known by the acronym Sundde. The government accuses the owners of the targeted stores of jacking up prices by 300 to 500 percent.
But Vieira and other owners deny that, saying the mandatory markdowns are pushing them to the brink of bankruptcy. In the capital’s historic center where Vieira keeps shop, most storefronts carry signs sporting the government’s seal and advertising “Sundde sales” or a “30-percent Sundde discount.” The discount is always 30 percent-the maximum amount of profit stores are allowed to make under a 2014 law. Two soldiers guard the entrance to Vieira’s store, allowing customers in two at a time.
“This is pure populism,” a furious Vieira said in the back room of the store, which he opened in 1995. “If we keep going at this rate, I’ll run out of shoes this month. I’m about to go bankrupt and close.” Vieira, 54, already lost one shoe store in 2010, when the government of Maduro’s late mentor, Hugo Chavez, expropriated the building where it was located.
Many customers are thrilled with the sales, however. “This is the best thing the government could have done this year because you have to give up eating just to buy yourself a shirt,” said Yaroski Mendoza, a 19-year-old cook waiting in line to buy a shirt, her baby in her arms.
Getting to the discounts means standing in long lines, but Venezuelans are used to that. They regularly wait hours to buy groceries. “We have to take advantage of this opportunity. Venezuelans like sporting new clothes for Christmas or New Year’s Eve,” said Isaac Quintero, a 28-year-old office worker.
But some shoppers feel guilty over the stores’ plight. “They’re practically giving their products away. (The government) is making them go broke for no reason,” said Anis Rodriguez, 50, a housewife shopping at a store where T-shirts were selling for less than half the usual price.
Jobs at risk
The T-shirt business was “destroyed” when the forced sale was imposed, said the manager, Mary, who asked that her last name not be used for fear of reprisals. She said the agents who swooped on the store were “very rude” and did not even bother looking at the records she showed them documenting the store’s pricing practices. “Our orders come from high up,” she said they told her. “This is a smoke bomb,” Mary added. “Since there’s nothing in this country, they have to distract people with something.” She fears losing her job because her boss has vowed to shut the store if the mandatory sale continues.
Venezuela’s oil-dependent economy has tanked as global crude prices have gone on a downward spiral since 2014. Short of the petrodollars on which it relies to import goods, the country is facing crippling shortages and inflation the IMF forecasts will hit 475 percent by year’s end.
It is not the first time Maduro-whose popularity has plunged along with the economy-has ordered Christmas sales. In 2013, he forced a household appliance chain to slash its prices by up to 70 percent. The company survived, but some stores’ shelves were still bare as much as a year later. —AFP
CARACAS: People watch the window of a shoe shop displaying signs informing of a 30% discount, in Caracas on Friday. The Venezuelan government ordered the owners of shops selling clothing, footwear and accessories to reduce their prices by 30% during Christmas. —AFP