Tuesday, July 12, 2016

Cuba Just Opened Its Own Communist Version of Costco

Cuba Just Opened Its Own Communist Version of Costco
by Reuters JULY 12, 2016, 5:02 AM EDT

It could become the island's first wholesale store for the fledgling
private sector.
Cuba has opened a shop in Havana that could eventually operate as the
Communist-ruled island's first wholesale store for the fledgling private
sector, offering products in bulk at lower prices than in expensive
retail outlets.

So far, Zona+, where produce is piled up to the ceiling like in a
warehouse, is offering only a handful of goods in large quantities at
slightly discounted rates. Shop employees said that was an experiment.

They said the plan was for Zona+ to sell everything in bulk at a
discount, catering in particular to the small businesses that have
flourished since President Raul Castro started reforming the
Soviet-style command economy.

Officials at CIMEX, the state commercial corporation that owns Zona+,
declined to comment and the store manager said he had been asked to give
no more interviews, after he told local media the aim was to become a
wholesale store. Cuban authorities are often secretive about their
economic plans.

"Some products already have a 20 percent discount, not all," said shop
employee Ulysses Abreu, 26, pointing to the 2.5-kg (5-pound) tins of
tomatoes. "But they are studying whether to sell all products at 20% in
the future."

One employee, who declined to be named for fear of retribution, said one
idea was to offer a 10% discount on purchases worth between $500 and
$1,000, and a 20% discount on purchases above $1,000.

Shoppers at Zona+ said it already had an advantage on other stores
because it was uncharacteristically well-stocked.

Cuba's supermarkets are often half-empty and supply problems look set to
increase as the government said last week it would cut planned imports
this year by 15%.

Cuba's new entrepreneurs have long complained that a gaping hole in
Castro's reforms is the lack of a wholesale market. Restaurant owners,
hairdressers and snack-store owners have to buy their produce in
supermarkets at the same marked-up prices as consumers.

The government announced in April that some cooperatives would be able
to buy supplies directly from government producers and wholesale outlets
for the first time but it did not say the reform would extend to the
private sector.

Cuba often likes to experiment with measures before making them official
and extending them across the country. Reforms can also be reversed.

Cuba decided at a secretive Communist Party congress earlier this year
to eliminate licenses for private wholesale agricultural food distribution.

Source: Cuba Just Opened Its Own Version of Costco - Fortune -

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