Moscow Grocery Store Becomes a Cornucopia : Russia: Rare Yeltsin success story may be enhanced by the employees’ plan to buy the establishment.

Shoppers who walked into Grocery No. 70 a month ago usually found nothing but “emptiness,” recalls Galina A. Polyanskaya, the store’s director.

“If you came early in the morning and stayed until late at night, you probably would have seen some product--a small quantity of sausage or milk--delivered,” she said. “But within an hour and a half, it would have been sold, and the shelves would be empty again.”

Now the shelves and refrigerated bins in this state-owned shop in Moscow’s industrial north are brimming with sausages, cheese, pork chops, several kinds of fish, lean beef sliced for stroganoff, Russian champagne and many other products that have been difficult to find in state stores for years.

“I live in this same building, so I come into the store almost every day,” said Olga Idrikova, 49, a seamstress. “The last time it was possible to see this much food available was in the ‘60s.”

Grocery No. 70, on the ground floor of one of Moscow’s countless prefabricated apartment buildings, is a rare success story for Russian President Boris N. Yeltsin’s economic reforms.

Soon after Yeltsin eliminated price controls and subsidies on most foods Jan. 2, the selection in Grocery No. 70 suddenly became plentiful. The new abundance results from three factors: The old state distribution system fills orders more efficiently because of the higher prices; the store can now deal directly with producers because it can offer them market prices, and managers are motivated to make the store a success because they plan to buy it.

“It’s not like an American supermarket,” said Felix A. Rosenstein, 63, a retired engineer who works as a concierge. “But compared to what used to be here, it’s a lot.”

Polyanskaya said her recipe for success is simple. She and her managers began circumventing the state-run supply network and making deals directly with food-processing plants, farms and dairies to ensure that the store has sour cream, cheese, meat and other basic foods available.

“We’re constantly on the telephones trying to get food into the store,” Polyanskaya said. “I’m not afraid to buy expensive things. I figure people have to eat, don’t they?”

To many customers, it is a relief to see food for sale, even at prices five to 20 times higher than they were a month ago.

“It is very expensive,” said Tatyana A. Gavricheva, 45, as she stood in line to buy cheese at 30 rubles a pound, or almost 10% of her monthly salary. “But it is better now that there is finally something to buy. This store has always been a little better stocked than the other ones around here, but since prices went up, the choice here is much bigger.”

Although customers are limiting their purchases because of the high prices, average daily sales have shot up from 30,000 rubles before the price increases to 200,000 rubles now, said Nadezhda Dneprova, the store’s chief accountant.

At the official exchange rate, the Russian ruble is worth about 2 cents, and at the tourist rate, a ruble goes for a bit less than 1 cent. The ruble is not freely convertible to other currencies.

After working almost 30 years in a system where she had no choice but to accept whatever the state price happened to be, Polyanskaya said she has quickly learned to bargain-hunt. If the price is too high, she said, no one will buy.

“We try hard to get goods at affordable prices so our customers will not go elsewhere,” she said. “We really want to satisfy our customers.”

Olga Kuibysheva, the deputy store director, said there are many advantages in working directly with suppliers instead of going through the state-run supply network. Finding new suppliers will soon be a necessity, because Yeltsin said recently that the state network will be dissolved.

“Now, when we get our dairy products directly from a collective farm, they try to give us better-quality goods, because they know that if they don’t we’ll go to some other collective farm,” Kuibysheva said as she watched the delivery of frozen Irish beef.

The one basic food the store cannot seem to stock is milk, Polyanskaya said. She said this is because the government still controls the price of milk, so dairies process it into sour cream and cheese, which they can sell at higher market prices.

Besides improving connections with Russian suppliers, Grocery No. 70 has also started receiving large quantities of beef, butter and rice in humanitarian aid, which it sells at prices determined by agreement between the foreign organization that donated the food and the state.

It is important to Polyanskaya and her staff to make their operation stand out because they are planning to buy the store under Yeltsin’s privatization policy.

“If customers get used to the idea that food is always available here, then when we buy our store we will all start earning more money,” Kuibysheva said. “We’re confident we’ll be able to buy our store and make lots of money. If we weren’t, we wouldn’t still be working here.”

Not everyone at the store shares the rosy outlook of the director and her deputy. In fact, the store’s chief accountant says the costs of keeping the store running--everything from rent to electricity--are going up so rapidly that she has no idea whether it can turn a profit.

“Our expenses are so huge that I can’t even count them. If I had a computer, maybe I could figure out what our costs will be, but not on this,” Dneprova said, pointing to her abacus. “I have no idea whether we will make a profit or not.”

(Southland Edition) Moscow Marketbasket

To many customers, it is a relief to see food for sale, even at prices up to 20 times higher than a month ago. Chart tracks the rise in prices since Russian President Boris N. Yeltsin lifted controls Jan. 2. New prices are as of Tuesday. Smoked Sausage (per pound): Subsidized state price before decontrol: 35.5 (in rubles) New price at stores: 159.0 (in rubles) Private market price: Not For Sale Number of hours avg. worker labors to purchase in stores: 29.0 (in rubles)

Chicken (per pound): Subsidized state price before decontrol: 15.5 (in rubles) New price at stores: 20.9 (in rubles) Private market price: 40.9 Number of hours avg. worker labors to purchase in stores: 3.8 (in rubles)

Butter (per pound): Subsidized state price before decontrol: 4.5 (in rubles) New price at stores: 25.5 (in rubles) Private market price: 36.4 Number of hours avg. worker labors to purchase in stores: 4.5 (in rubles)

Macaroni (per pound): Subsidized state price before decontrol: 1.1 (in rubles) New price at stores: 8.0 (in rubles) Private market price: 22.7 Number of hours avg. worker labors to purchase in stores: 1.5 (in rubles)

White bread (per loaf): Subsidized state price before decontrol: 0.6 (in rubles) New price at stores: 3.3 (in rubles) Private market price: Not For Sale Number of hours avg. worker labors to purchase in stores: 0.6 (in rubles)

Sugar (per pound ration coupon required): Subsidized state price before decontrol: 1.1 (in rubles) New price at stores: Not For Sale Private market price: Not For Sale Number of hours avg. worker labors to purchase in stores: --

Milk (per quart): Subsidized state price before decontrol: 0.7 (in rubles) New price at stores: 1.8 (in rubles) Private market price: 76.0 Number of hours avg. worker labors to purchase in stores: .3 (in rubles)

Fresh fish (per pound): Subsidized state price before decontrol: 0.6 (in rubles) New price at stores: 11.4 (in rubles) Private market price: 54.5 Number of hours avg. worker labors to purchase in stores: 2.7 (in rubles)

The average Russian worker earned about 960 rubles a month as of Jan. 1, according to the Russian Ministry of Labor. That is equivalent to about $9.60 at the floating exchange rate, calculated on the basis of ruble auctions.