By David South, Development Challenges, South-South Solutions
As the global downturn bears down on country after country, governments around the world are introducing austerity measures to try to keep their economies going. Many countries are now facing financial crisis and the need for loans and support from the International Monetary Fund (IMF).
Formerly comfortable people are going from regular employment to unemployment or erratic employment, and growing numbers of people are finding it hard even to afford basics such as food.
In Balkan nation Serbia, trade unions have come up with a solution: they are called SOS Shops and they feature food and other products priced at as much as 70 percent less than regular shops. By cutting back on the profit margin for the products, the store can make drastic cuts in prices.
In the capital, Belgrade, the shops are run by trade unions in partnership with a local retail chain, Jabuka. The Association of Free and Independent Trade Unions uses Jabuka to run the stores. Anyone with an income below 20,000 dinars (US $280) a month can receive a special card to shop at the SOS stores.
In Jabuka’s other stores, the profit margin is 20 percent, and in rival stores it can be over 30 percent. Jabuka also makes savings by sourcing locally and suppliers offering discounts of between 15 percent and 25 percent.
“The prices there are 30 to 50 percent lower than in major supermarkets,” Jabuka manager Milorad Miskovic told IPS. “It’s a hard time for many people, so we decided to lower our margin of profit to only five percent at the SOS shops.
“SOS shops are intended for the socially handicapped. SOS shops offer goods at lower prices to Serbian citizens earning minimum wages or pensions lower than RSD 20,000, to the unemployed, to the displaced from Kosovo and the citizens on the dole (welfare).”
Hard hit by the global downturn, Serbia has seen its recent boom times disappear quickly. The country had enjoyed average yearly growth since 2000 of 6.7 percent.
The country is currently negotiating bridging loans with the IMF (www.imf.org). The conditions for the loan mean severe cuts to public sector wages and tax rises.
According to the Serbian Statistical Office, Serbia has lost 10,000 jobs a month since the beginning of 2009. The official unemployment rate is 14 percent, and the government believes half a million people now live below the official poverty line, out of a population of 10 million.
“Many people have lost their jobs and the main problem is that the middle class is now poor. That is the real problem,” Nebojsa Rajkovic of the Association of Independent Trade Unions told the BBC. “The government prepared a social programme to deal with the economic crisis in Serbia, but it was not enough and that is the reason the union devised this project.”
This month, the Jabuka trade company opened its third SOS shop in Belgrade. The shop, the largest SOS shop so far, will be opened in the Mirijevo neighbourhood of Belgrade, and it will offer a wider range of products.
The unions plan to open 100 social supermarkets this year. Basic staples like bread, milk and potatoes are the cheapest goods. Unlike other supermarkets, the stores feature local brands and products made in Serbia: a boost to local producers in the economic downturn.
In order to stop hoarding of the cheap food or people buying a lot and then selling it for a profit, the amount that can be bought on one shopping trip is limited. For example, just three bottles of cooking oil are allowed each time.
“Most people in Serbia are finding things difficult financially. We only have maybe five or 10 percent of the population who don’t have financial problems,” continued Rajkovic.
One customer, 26-year-old Milica Marjanovic , found the shops provided much-needed support to her unemployed family. “My mother, my sister and I are unemployed. We don’t get any social benefits,” she said to the BBC.
“There are a lot of unemployed people in Serbia, life is hard for a lot of people and they can hardly manage.
“Many families don’t even have what is basic for living. So, these shops are welcome.”
Published: May 2010
The Co-operative Food: This pioneering network of supermarkets offers both affordable food prices for customers and good prices and terms for suppliers. They are a founding member of the Ethical Trading Initiative (ETI). This is an alliance of companies, trade unions and non-governmental organisations (NGOs) working together to improving working conditions in supply chains.
Development Challenges, South-South Solutions was launched as an e-newsletter in 2006 by UNDP’s South-South Cooperation Unit (now the United Nations Office for South-South Cooperation) based in New York, USA. It led on profiling the rise of the global South as an economic powerhouse and was one of the first regular publications to champion the global South’s innovators, entrepreneurs, and pioneers. It tracked the key trends that are now so profoundly reshaping how development is seen and done. This includes the rapid take-up of mobile phones and information technology in the global South (as profiled in the first issue of magazine Southern Innovator), the move to becoming a majority urban world, a growing global innovator culture, and the plethora of solutions being developed in the global South to tackle its problems and improve living conditions and boost human development. The success of the e-newsletter led to the launch of the magazine Southern Innovator.
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© David South Consulting 2022