Private grocery stores in Cuba are flourishing, although they are only accessible to a small number of people due to their high prices.
Previously, this area served as a single-car garage for a residence in Havana, Cuba. Now, it has been transformed into a compact but well-stocked grocery store. The large sign at the entrance tempts customers with a variety of items including cooking oil, tomato sauce, Hershey’s cocoa powder, Nutella, shampoo, cookies, and jam – a valuable find in a country experiencing shortages.
One of many small grocery stores that have appeared in Cuba over the past few months is a nameless shop located in the residential area of El Vedado. These stores are commonly known as “mipymes” (pronounced MEE-PEE-MEHS), which is derived from the Spanish words for small and medium-sized businesses that were permitted to open in 2021.
The Cuban government’s decision to permit new businesses was aimed at alleviating the struggling economy and promoting domestic manufacturing. The list of approved enterprises, which currently stands at nearly 9,000, includes sewing workshops, fisheries, and construction companies. However, it appears that small retail shops like the one in Vedado are being established at a rapid pace.
These vendors are more well-known to the public because they have a wider range of products that are not found elsewhere and often run their businesses from their own homes or garages.
Although their setup is simple, their prices are still unaffordable for professionals such as doctors and teachers who only earn about 7,000 Cuban pesos per month (equivalent to $28 in the parallel market).
An instance of this would be a kilogram (equivalent to 2.2 pounds) of powdered milk purchased from the Czech Republic at a rate of 2,000 Cuban pesos (roughly $8). A jar of mayonnaise from Spain is priced at $4. In comparison, two and a half kilograms (around 5 pounds) of chicken shipped from the United States has a cost of $8. In addition, there are also non-essential items available: a jar of Nutella for $5 and a bottle of sparkling wine from Spain for $6.
The individuals who are eligible to patronize these smaller stores are Cuban households that receive money from overseas, employees in the tourism industry, diplomats, workers at other small and medium-sized companies, artists, and elite 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.”
Aside from her regular monthly salary from the state, Espinosa also earns extra income and receives financial support from her husband, who has been living in the United States for a year and a half and used to reside in Uruguay.
A retiree named Ingracia Virgen Cruzata expressed frustration with the expensive prices at the nearby shop, just a few meters away. She shared, “Last year, I retired with a monthly income of 2,200 Cuban pesos (equivalent to $8.80) and I am unable to afford a simple package of chicken.”
The majority of items in these establishments are brought in directly by business owners via government-controlled import organizations. This process has also allowed for larger and more well-stocked stores to emerge.
A new store has opened on the outskirts of Havana that can only be accessed by car owners. It contains large shelves stocked with imported items like Tide detergent, M&M’s candy, and Goya brand black beans. Due to its considerable size (at least 10 times bigger than the store in Vedado) and variety of products, it has earned the nickname “Cuban Costco.”
For many years, Cuba’s retail industry has been severely restricted and controlled by the communist government. They have maintained a monopoly on the majority of retail activities, including sales, imports, and exports, in order to ensure fair distribution of goods.
Cubans use ration books to purchase limited amounts of essential items such as rice, beans, eggs, and sugar each month. These books are the foundation of their economic system, sustaining families for approximately 15 days. Any additional food needed must be obtained from other sources, such as government-run stores and the newly introduced mipymes.
In addition, there are state-owned businesses that offer a wider range of products to meet local demands. However, they only accept payment through local debit or international credit cards. What’s new is that smaller shops, such as the one in Vedado, and larger stores, similar to “Cuban Costco,” are privately owned and allow payments in Cuban pesos.
According to Pedro Freyre, a consultant and professor, small and medium-sized private companies are now legally permitted for the first time in 60 years. The task at hand is for them to thrive in a challenging environment for private businesses.
According to Freyre, Cuba remains a socialist country with its fundamental ideology intact, but is currently facing economic challenges that have created opportunities for change.