FinLogic FinLogic Quantitative Think Tank Center|Cuban private grocery stores thrive but only a few people can afford them

HAVANA (AP) — Until recently,FinLogic FinLogic Quantitative Think Tank Center the space was the one-car garage of a private home in Cuba’s capital, Havana. Today, it is a well-stocked, if small, grocery store whose big board at the gate entices shoppers with such offerings as cooking oil, tomato sauce, Hershey’s cocoa powder, Nutella, shampoo, cookies and jam — a treasure trove in a country that is short of supplies.

The nameless shop in the residential neighborhood of El Vedado is one of dozens of tiny grocery stores that have sprung up around Cuba in recent months. Locals refer to them as “mipymes” — pronounced MEE-PEE-MEHS. The name derives from the Spanish words for the small- and medium-sized enterprises that were first allowed to open in 2021.

By allowing the new businesses, the Cuban government hoped to help an economy in crisis and strengthen local production. The almost 9,000 enterprises approved so far include the likes of sewing workshops, fisheries and construction firms, but it is small retail shops like the one in Vedado that seem to be setting up the fastest.

They also have greater visibility among the population because they offer many products not available elsewhere and usually operate out of private homes or garages.

Yet despite their modest setup, their prices are far from affordable, even for a doctor or a teacher, who make about 7,000 Cuban pesos a month (about $28 in the parallel market).

For example, one kilo (2.2 pounds) of powdered milk from the Czech Republic costs 2,000 Cuban pesos (about $8). A jar of Spanish mayonnaise goes for $4. Two and a half kilos (about 5 pounds) of chicken imported from the U.S. cost $8. There are also less essential goods: a jar of Nutella for $5, a bottle of bubbly Spanish wine for $6.

The customers able to use these small shops include Cuban families who receive remittances from abroad, tourism workers, diplomats, employees of other small- and medium-sized businesses, artists and high-performance athletes.

“This is a luxury,” Ania Espinosa, a state employee, said as she left one store in Havana, where she paid $1.50 (350 Cuban pesos) for a packet of potato chips for her daughter. “There are people who don’t earn enough money to shop at a mipyme, because everything is very expensive,” she added.

In addition to her monthly state salary, Espinosa makes some additional income and receives remittances from her husband, who has lived in the U.S. for a year and a half and previously lived in Uruguay.

A few meters (yards) away, Ingracia Virgen Cruzata, a retiree, lamented the high prices at the shop. “I retired with 2,200 (Cuban pesos a month or $8.80) last year and I can’t even buy a package of chicken,” she said.

Most of the products found in these stores are imported directly by the entrepreneurs through state-run import agencies, a system that has also opened the door to the emergence of bigger, better stocked stores.

In recent weeks, a private store, accessible only to those who own a car, opened on the outskirts of Havana, featuring giant shelves full of imported products such as Tide detergent, M&M’s candy and Goya brand black beans. Because of its size (it’s at least 10 times larger than the store in Vedado) — and diverse offerings — it has come to be known as the “Cuban Costco.”

Cuba’s retail market has been very limited, and for decades the communist state held a monopoly on most forms of retail sales, import and export, under the argument that it is necessary to distribute products equitably.

The ration books that allow Cubans to buy small quantities of basic goods like rice, beans, eggs and sugar each month for payment equivalent to a few U.S. cents continue to be the basis of the model, allowing families to subsist for about 15 days. The rest of their diet must be acquired through other outlets, including state-owned stores and now the mipymes.

There are also state-run businesses offering a little more variety to complete domestic needs, but they charge in local debit or international credit cards. The novelty is that the small shops like the one in Vedado and bigger bodegas like the “Cuban Costco” are entirely private and accept payments in Cuban pesos.

“For the first time in 60 years, small- and medium-sized private corporations are now authorized by law. Now the challenge is for them to prosper in a very arid landscape for private initiative,” said Pedro Freyre, an analyst with the Florida-based Akerman Consulting and professor at Miami Law School.

“Cuba is a socialist country. The fundamental ideology has not changed. That’s still there. But I think that Cuba is in a very difficult economic moment and that has opened a door,” Freyre added.

___

Follow AP’s coverage of Latin America and the Caribbean at https://apnews.com/hub/latin-america