Private grocery stores thrive in Cuba, but only a few people can afford them
The unnamed store in the residential neighborhood of El Vedado is one of dozens of small grocery stores that have popped up across Cuba in recent months. Locals refer to them as “mipymes” – pronounced MEE-PEE-MEHS. The name is derived from Spanish words for small and medium-sized businesses that were allowed to open for the first time in 2021.
By allowing new businesses, the Cuban government hoped to help the economy in crisis and boost domestic production. The roughly 9,000 businesses approved so far include tailoring shops, fisheries and construction companies, but small retail stores like the one in Vedado appear to be the quickest to set up.
They also have greater visibility among residents because they offer many products that are not available anywhere else and usually operate out of private homes or garages.
But despite their modest setup, their prices are far from affordable, even for a doctor or teacher, who earns 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 costs $4. The price of two and a half kilograms (about 5 pounds) of chicken imported from the United States is $8. There are also less important items: a jar of Nutella for $5, a bottle of Spanish wine for $6.
Customers able to use these convenience stores include Cuban families receiving remittances from abroad, tourism workers, diplomats, employees of other small and medium-sized businesses, artists, and high-performance athletes.
“This is luxury,” said Ania Espinosa, a government employee, as she left a store in Havana, where she paid $1.50 (350 Cuban pesos) for a packet of potato chips for her daughter. “There are people who do not earn enough money to shop on the mipyme store, because everything is very expensive,” she added.
In addition to her monthly salary from the state, Espinoza earns some additional income and receives remittances from her husband, who has lived in the United States for a year and a half and previously lived in Uruguay.
A few meters away, Engrassia Virgen Crozata, a retiree, lamented the high prices at the store. “I retired on a salary of 2,200 (Cuban pesos per month or $8.80) last year and I can’t even buy a box of chicken,” she said.
Most of the products in these stores are imported directly by entrepreneurs through state-run import agencies, a system that also opened the door to the emergence of larger, better-stocked stores.
In recent weeks, a special store was opened on the outskirts of Havana, accessible only to those with a car, and includes giant shelves full of imported products such as Tide detergent, M&Ms candy and Goya black beans. Because of its size (at least 10 times larger than the store in Vedado)—and diverse offerings—it became known as the “Cuban Costco.”
Cuba’s retail market was very limited, and for decades the communist state monopolized most forms of retail sales, imports and exports, arguing that it was necessary to distribute products fairly.
Ration books, which allow Cubans to buy small quantities of basic goods such as rice, beans, eggs and sugar each month for the equivalent of a few US cents, still form the basis of the model, allowing families to survive for about 15 days. The rest of their diet must be obtained through other outlets, including state-owned stores and now mipymes.
There are also state-run companies that offer a little more variety for local needs, but charge fees for local debit cards or international credit cards. What’s new is that small stores like the one in Vedado and larger bodega like the Cuban Costco are completely private and accept payment in Cuban pesos.
“For the first time in 60 years, small and medium-sized private companies are now permitted by law. The challenge now is for them to thrive in a region that is too barren for private initiative,” said Pedro Freire, an analyst at Florida-based Ackerman Consulting and a professor at Miami Law School.
“Cuba is a socialist country. The basic ideology has not changed. That is still there. But I think Cuba is going through a very difficult economic moment and this has opened the door for it,” Freire added.
Follow AP’s coverage of Latin America and the Caribbean at https://apnews.com/hub/latin-america
(Tags for translation) Small Business