Supermarkets close and panic-buying ensues as Lebanese pound tumbles to 15,000 to the dollar

Fluctuating prices leave stores unable to operate and shoppers worried

Small supermarkets closed their doors on Tuesday and shoppers hoarded food after the Lebanese pound lost half of its value in only a week.

The pound is officially pegged at 1,507.5 to the dollar but has fallen sharply in the past 18 months, trading at 15,000 to the dollar on Tuesday on the parallel market.

The rapid drop in the currency led some Lebanese to panic-buy.

Hassan Hamade, 80, filled his trolley with coffee, rice and other necessities he is buying in bulk at a Spinneys supermarket in Beirut.

"Every hour we have a different rate and different prices. It's catastrophic," he told The National.

“The state is absent and every supermarket has a different pricing.”

From high-end supermarket chain Spinneys to the local co-operative catering to working-class people 15 minutes away, stores were packed with customers buying kitchen essentials, such as coffee and cooking oil, in bulk.

The purchasing power of millions of Lebanese and residents has crashed since the country was hit by a severe economic crisis in late 2019, triggered by a shortage of foreign currencies and decades of high-level corruption.

Prices of non-subsidised goods have rocketed, with rapid inflation leaving shopkeepers unable to keep track of the new exchange rate and shoppers fearing shortages.

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Every hour we have a different rate and different prices. It's catastrophic

Lebanese citizens and residents rely on goods imported in dollars for basic necessities such as wheat, fuel and even legumes.

Mr Hamade owns a small business importing white goods in dollars. He said his children living abroad helped him weather the crisis as work became scarce.

“A few weeks ago I wrote a receipt for a customer at a rate of 8,000 pounds to the dollar for equipment bought in dollars. When they pay me now it will be effectively at half price,” he said.

Pricing has become a major hurdle for business owners as the exchange rate has fluctuated daily in the past week. Many supermarkets and caterers closed their doors while they waited for the rate to stabilise.

Vigilantes on motorbikes toured the capital urging shops to close down instead of increasing prices on Tuesday to protest against inflation, which has reduced the value of wages while prices soar.

Samer Kays, owner of Kays supermarket in the busy district of Mar Elias in Beirut, says he refuses to close but has no choice but to increase prices.

Only a couple of customers shopped at his two-storey supermarket, which has become too pricey for many in the middle-class neighbourhood.

“My colleagues are closing their shops because they had priced their products at 8,000 pounds to the dollar and now we’re headed towards a rate of 16,000, so they will lose money,” he said.

A pack of imported cigarettes that was worth 12,000 pounds last week now costs 16,000, he told The National, and said he stopped sticking new prices on his products.

“You would need two employees to keep changing the stickers all day,” he said, with exasperation in his voice.

His father opened the shop 70 years ago during Beirut’s golden era. Mr Kays took on the family business after years spent abroad and hoped to earn a decent living running the shop, but the crisis dashed his dreams.

“All I can do now is guard this place, like a concierge,” he said, his voice quivering. “I can barely cover my spending.”

Some petrol stations have also begun closing their doors in the past few days while others limited their opening hours because of shortages, two employees of different stations told The National.

Caretaker Energy Minister Raymond Ghajar said last week that Lebanon may have “no electricity at all” by the end of March should the cash-strapped government fail to secure funds needed to buy fuel.

Hundreds of people have been blocking roads throughout Lebanon since early March to protest against deteriorating living conditions but Lebanese officials have yet to enact any policies to halt the fall of the pounds.

The country has been run by a caretaker government since Prime Minister Hassan Diab resigned in August after a deadly blast struck Beirut’s port, killing more than 200 people and destroying half of the capital.

Politicians bickered about their share of the coming Cabinet for the past eight months, crushing hope of enacting the economic reforms needed to unblock millions in debt relief and loans granted by donor countries and international lenders.

Shopper Hoda Sraj said peaceful protests are Lebanon’s only hope for change.

“Our politicians have not lifted a finger while their people go hungry,” the homemaker, 60, said as she filled her trolley with coffee at Spinneys.

Her husband and children, who work abroad, are her only lifeline in the country, in which foreign currencies are now scarce.

Despite their financial support, she says she is afraid for the future as the economic crisis is set to deepen.

“I might as well buy my groceries today because tomorrow the pound may tumble to 20,000 or even 50,000,” she said.

“No one knows how far this could go.”