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FEATURE-Slovenia opens shop for poor as crisis bites

Published 03/18/2009, 09:22 AM
Updated 03/18/2009, 09:24 AM

* Slovenians flock to shop open only to the poor

* Customers must show proof of low income

* More branches planned across the country

By Marja Novak

LJUBLJANA, March 18 (Reuters) - Crisis-hit Slovenians are flocking to a new shop selling basic food and beauty products only to those who can prove they are poor.

Slovenia's first shop aimed only at the hard-up shows how fortunes have changed in a country that prospered in the years following independence from the former Yugoslavia in 1991.

Only people who can prove they earn less than 500 euros ($650) a month can shop in the store, which sells basic goods at discounts of as much as 70 percent.

"This shop is a realistic picture of our times, which are sad," said Martin Perme, a 59-year-old security guard and one of the first customers in the shop, which opened this week.

"I lost my job a few weeks ago because our company went bankrupt but I am lucky as I will be able to retire in July," he said.

Slovenia, the fastest growing euro zone member in the past two years, has been hammered by the global economic crisis and employers have been slashing jobs.

"While we had fewer than 60,000 unemployed in September, we now have almost 79,000," said Mavricija Batic of the national Employment Service, which expects the number of jobless to rise to 100,000 this year.

The head of the private company that operates the SOS Shop on the outskirts of Ljubljana said five more shops would open across Slovenia in the next three months.

"We expect each will have some 400 to 500 customers by the end of the year," said Alan Jurakovic, head of SOS Zadruga, which operates the shop.

SPECIAL CARD

Those wanting to become customers have to produce an income statement to get a special card for the shop. To prevent reselling, customers are also limited to purchases of 60 euros per month.

The shop operates on premises partly paid for by the local community and sells products it gets for free or buys at a discount from producers. Some items, such as bread, will be given away for free near their expiry date.

In the first days of the new shop, pensioners were the most common visitors.

"Life was difficult for those of us who have small pensions even before we adopted the euro but it got worse since then because everything got more expensive. There is no way I can save even one euro from my pension any month," said 83-year-old Fani Sekula.

Slovenia joined the European Union in 2004 and adopted the euro in 2007. It posted a record 6.8 percent economic growth in 2007 but growth halved in 2008 due to the global crisis.

Many analysts say the country will fall into recession this year and forecast the economy will contract for the first time since 1992.

The government still hopes for growth but the main economic indicators suggest otherwise -- exports fell by as much as 26 percent year-on-year in January while industrial output dropped 17.5 percent in December.

So far 390 companies with 42,500 employees decided to shorten labour hours due to lower demand for their products. (Reporting by Marja Novak and Tina Smole; Editing by Zoran Radosavljevic and Guy Faulconbridge)

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