Venezuela or­ders stores to get into Christ­mas spirit

Manda­tory ‘sales’ push­ing re­tail­ers to the brink of bank­ruptcy

Kuwait Times - - BUSINESS -

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.

Shop­pers’ guilt

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

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