As currency plummets, Lebanon’s retailers close shop
Annahar- Hanke | July 2, 2020
Massive Lebanese retailers have announced “temporary” closures as the national currency hits record lows, signaling an impending collapse of the sector.
Mike Sport, Marie France and LC Waikiki, among others, have issued statements announcing the closures of their stores given the volatility of the black market rate.
The small Mediterranean country has seen the local currency lose more than 80% of its value against the U.S. dollar in recent months, trading for as much as 9,000 LBP to the dollar this week.
“Due to the current crisis, we have regretfully decided to temporarily stop selling in all our stores,” Marie France, one of Lebanon’s largest lingerie sellers, said in a statement.
“We refuse to price our products based on the currents market rates,” it said, highlighting the struggles businesses face in today’s economic climate.
Puma, the renowned sports apparel brand, also followed suit, closing all its branches across Lebanon. Madame Coco, Etam, Undiz, Jennyfer and Tape A L’Oeuil joined the strike as well, issuing a joint statement decrying the current state of affairs.
“Due to the economic crisis that is affecting all of us, it’s time to stick together and shout out loud to make ourselves heard and survive this critical situation,” they said.
“It is almost impossible to keep up with the rising dollar rate and we cannot accept to increase our prices that much,” Marie France owner Nicolas Abi Nasr told Annahar. “Underwear that used to cost 20,000 Lebanese pounds now costs 100,000 LBP,” he added.
With the Lebanese pound surpassing 9,200 LBP per dollar in the black market, inflation has grown by more than 510 percent per year, according to Professor Steve Hanke at Johns Hopkins University.
Mike Sport, a leading sportswear seller, echoed Marie France’s statement. “Mike Sport’s online store, as well as all retail branches, will be closed until further notice,” the company announced.
Lebanon, one of the most indebted nations in the world, has asked the International Monetary Fund for a bailout after defaulting on its sovereign debt, but the talks appear to be faltering, with hardly any progress made after more than 15 sessions.
With prices soaring on a daily basis, people have been rushing to supermarkets and grocery shops to stock up on essential products. Shoppers have reported missing products, from shampoos to cereal across different supermarkets.
In response, a number of supermarkets, including Spinneys, have begun imposing restrictions on the number of items shoppers can buy to avoid massive shortages.
On Tuesday afternoon, Al-Makhazen Coop, one of the largest supermarket retailers in the country also closed its stores in Beirut.
As Lebanese’ purchasing power took a hit, Economy Minister Raoul Nehme issued an order Wednesday to increase the price of 900 grams (32 ounces) of bread by 33% to 2,000 pounds.
This came at the heels of the Lebanese military announcing that soldiers on duty will no longer be served meat and poultry with meals as Lebanon grapples with its most severe economic crisis. A soldier’s salary is now also worth some $110.