Dollars or pounds? Lebanon's supermarkets begin pricing goods in dollars

Move comes as local currency depreciates rapidly and fluctuates wildly

Lebanese supermarkets began displaying prices in dollars from March 1, 2023

The price tags of imported items on Lebanon's supermarket shelves displayed dollars on Wednesday ― an attempt by the ministry of economy to regulate flagrant price manipulation as the Lebanese pound continues to depreciate rapidly.

The rapid inflation has created chaos and confusion in supermarkets.

The new measure will also force supermarkets to display the rate to the dollar at which goods are priced, a move that in theory will make it easier for customers to know the true value of the goods they are buying.

At a downtown supermarket in Lebanon's capital on Wednesday, a television screen above a row of cashiers prominently displayed the pound-to-dollar rate , part of the economy ministry's decision to make supermarkets display the rate in-store.

The television displayed a rate of "1 USD = 89,000 LBP". A line under the rate stated the date and time of the last update of the rate to the dollar.

Lebanese supermarkets from March 1 began displaying prices in dollars. Nada Homsi / The National

"The rate is updated regularly," a customer service representative from the supermarket chain confirmed to The National over the phone. "We update every time it goes up or down."

Customers will now have the option to pay in dollars rather than with the nation's rapidly plummeting local currency. They will also continue to have the option to pay in Lebanese pounds, according to the exchange rate that the supermarket has set.

The new measure will apply to imports that are bought in dollars by suppliers. But items bought using the national currency, such as cigarettes, bread, fruit and vegetables will still be displayed in pounds.

At the supermarket in Beirut, employees worked to rapidly stick updated price tags on shelves. The spice section, among others, had still not been priced, and displayed empty price tags.

An employee told The National they had been working on changing prices since the night before.

"We're still not done yet, we have a few more sections to go."

A kilogram of marinated chicken breast was priced at $5.99, or 533,110 Lebanese pounds. Colgate whitening toothpaste was priced at $5.45. A can of corn, $1.15. Three kilograms of rice was $5.70.

Shoppers in a supermarket in Beirut where the prices of goods are in US dollars, March 1, 2023. Reuters

"When you look at the prices in dollars they aren't as scary," the employee said. "But in Lebanese, they're pretty scary."

The new pricing system has done little more than formalise the de facto dollarisation of the country, reflected in supermarkets. But affordability is a crucial concern for Lebanon, a country where the vast majority of Lebanese are still paid in Lebanese pounds and where a public sector employee earns as little as the equivalent of $50 per month, and two thirds of the population are impoverished.

On Tuesday, caretaker economy minister Amin Salam said the move was not a solution but could mitigate some of the effects of the fluctuations by regulating prices to prevent profiteering.

Mr Salam said there was not much the ministry could do about the cost of basic necessities, given the rapid devaluation of the pound to the dollar — once pegged at 1,507 to $1 but now trading at 89,000.

Lebanon has been reeling from an economic crisis since 2019 that has all but collapsed the nation. As the national currency continues its freefall and salaries paid in Lebanese pounds continue to devalue, the vast majority of goods and services are now priced in dollars or their equivalent in pounds.

In the Beirut supermarket, customers queued at the checkout counter. After ringing up products for each customer, cashiers asked patrons a question that has come to define Lebanese residents' most continually harrowing woe: "Do you want to pay in dollars or Lebanese?"