Shoppers Find Empty Shelves After Venezuela Orders Discounts

(Bloomberg) -- Finding basic items in crisis-torn Venezuela has just gotten a lot harder.

Hordes of desperate shoppers emptied supermarkets and bodegas last week after President Nicolas Maduro ordered hundreds of grocery stores slash their prices in the latest attempt to put a lid on hyperinflation. On Wednesday, store shelves remained painfully bare across the capital, Caracas, with many doubting they would be restocked anytime soon.

“Expensive food was better than no food at all,” said Lucy Zarate, a 62-year-old caretaker, as she surveyed a barren meat counter at an east Caracas grocery store. “It’s madness; bread today, hunger tomorrow,” she added, citing a Spanish proverb.

The mandated price cuts came amid a rash of protests and looting during the holiday season, when Venezuelans typically use their Christmas bonuses to go on a lengthy vacation. But as the economic meltdown forces thousands to skip meals or rummage through the trash for leftovers, few had reason to celebrate.

“Usually, you finish the holidays in debt because you had a good time,” said Nohemi Osario, a 43-year-old occupational therapist. “But this year we went broke trying to buy groceries.”

Venezuela’s ruling socialists have long resorted to foreign-exchange controls and price caps in a bid to make staples affordable. But, in practice, many goods are in perpetual short supply as producers struggle to cover costs. And now food sellers fear they may be unable to recover from the latest round of price cuts, which targeted the most basic goods such as vegetables, meat, butter and cooking oil. 

“It’s not our fault our distributors keep raising prices,” said Emerson Quintero, 28, manager of a Luvebras supermarket in eastern Caracas. “Now they’re saying they won’t even dispatch to us.”

Quadruple-Digit Inflation

Economists widely prescribe easing the country’s byzantine controls as part of a strategy to tackle quadruple-digit inflation and shortages, but Maduro has doubled-down on them, pushing prices even higher.

Venezuela’s opposition-led National Assembly estimates that prices rose 85 percent last month, with annualized inflation of more than 2,600 percent in 2017. The central bank has stopped publishing regular economic indicators. Authorities blame rising prices on government foes -- at home and abroad -- trying to stoke unrest and undermine Maduro’s rule.

“These acts cannot be considered mere speculation; they’re criminal acts against the country,” William Contreras, the head of Venezuela’s pricing authority, told daily Ultimas Noticias last week. “There’s no reason for them to be changing prices and that’s why we’re making corrections,” he said, adding that store inspections would continue.

Business leaders said the price cuts did away with what little capital many supermarkets had.

“Now we’re in a situation where stores simply don’t have the cash to restock,” said Maria Carolina Uzcategui, president of Consecomercio, one of Venezuela’s largest trade chambers. “Shortages will go from bad to critical.”

To contact the reporter on this story: Andrew Rosati in Caracas at arosati3@bloomberg.net.

To contact the editors responsible for this story: Vivianne Rodrigues at vrodrigues3@bloomberg.net, Walter Brandimarte

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