Venezuela: not for the faint of butt!

A little over 20 years ago, Robin and I went on our honeymoon.

To Venezuela.

Really.

At one point we ended up staying in the Caracas Hilton. It was not a fun experience. Ordered room service never arrived. It didn’t smell very good in the hallways, Neer-do-wells inhabited the bar. At one point, I called the front desk to enquire if they were really a part of the Hilton chain or had just appropriated the logo.

But I will say this in its favor: THERE WAS PLENTY OF TOILET PAPER AND SOAP!

Sadly, this no longer appears to be true in some Venezuelan hotels.

“It’s an extreme situation,” says Xinia Camacho, owner of a 20-room boutique hotel in the foothills of the Sierra Nevada national park. “For over a year we haven’t had toilet paper, soap, any kind of milk, coffee or sugar. So we have to tell our guests to come prepared.”

But then again, there’s this:

“In the black market you have to pay 110 bolivares [$0.50] for a roll of toilet paper that usually costs 17 bolivares [$ 0.08] in the supermarket,” Camacho told Fusion. “We don’t want to participate in the corruption of the black market, and I don’t have four hours a day to line up for toilet paper” at a supermarket.

As a result, Camacho said she’s been asking her guests to bring their own toilet paper since December.

So if Ms. Camacho can’t get her government subsidized toilet paper conveniently, she will eschew paying the market price (fifty cents!!!!!) and leave her customers high but possibly not dry.

Now that does sound like the Caracas Hilton of 1994.

One toilet paper roll at a time

I read an interesting article recently in the WSJ about Wal-Mart’s decision to adopt bodega-type stores in Mexico to better compete for low-income consumers.  Since that piece is gated, try checking out this article, which gives a lot of background information.  Apparently, Wal-Mart has experimented with a 3-pronged approach in Mexico and hopes to re-create the experiment in other emerging markets.  Briefly, the three prongs are:

1. The creation of a “compact hypermarket” called Bodega Aurrera, carrying a mix of “roughly 60% food and 40% non-food items, measuring about 42,000 square feet.”  I don’t know anything about retailing, but Aurrera?  Who came up with that?  It sounds horrible to me, but what do I know?

2.  A neighborhood supermarket called Mi Bodega that is smaller and focuses more on food items.  Now this name I like.

3.  Yikes, back to the Aurrera name.  The third creation is the Bodega Aurrera Express and it is a “soft discount store.”  Hmm, what does the adjective soft mean here? According to the article, it will have “an 80% food vs 20% non-food mi, focusing heavily on price and convenience as the primary trip drivers.”

Wal-Mart is hoping to provide a bridge between formal and informal markets.   One of the ways they are doing this is by “offering smaller packages or the option of buying one-packs (vs bundles) for things that other retailers wouldn’t bother doing.”  Check out the pet food sold by the meal and toilet paper sold by the roll:

petfood    toiletpaper

That is smart business!

Funny Sidenote:  The toilet paper innovation reminded me of Jim Gaffigan’s riff on Hot Pockets and the impossibility of buying toilet paper in a dignified way (given that they come 18 rolls per case). Here’s the piece if your are looking for a laugh:

Your 21st Century Socialism Roundup

1. Due to shortages of basic, price-controlled commodities, Venezuela has introduced a rationing system that limits the quantities people can buy in supermarkets. People being people, have started buying the max quantity in one supermarket and then going to another and buying more. So the government is piloting a web-based system that registers all purchases of rationed items and supposedly will prevent duplicate buying (the article is very short on details of how this would work, it may just be cheap talk / jawboning). Among the 20 rationed goods are “leche, arroz, aceite, harina, azúcar, papel higiénico, crema dental” (milk, rice, cooking oil, flour, sugar, toilet paper, toothpaste). Yikes!

2. The Venezuelan government is trying to gauge international interest in a bond sale to raise dollars to buy….toilet paper? Plenty of other snarky tidbits in the article including the fact that while the (recently devalued) Bolivar officially exchanges at 6.3 per dollar, the black market rate is around 28 per dollar.

3. Finally, an amazing article about political feuding inside post-Chavez Chavismo by the excellent Alma Guillermo-Prieto in the NY Review of Books.