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The merkato in Addis Ababa is an enormous market that spans several square miles. Here shoppers can find everything imaginable, from local crafts, fruits and spices to swords and metal works. Haggling is completely acceptable—and expected. Be prepared to bargain assertively, since foreign visitors are almost always charged a higher price. Avoid “brokers” who try to lead you to certain booths, as they are probably working on a commission that will ultimately increase your price. Protect yourself from the multitude of pickpockets by keeping your hand on your wallet at all times.
For those too timid or without the time to brave Merkato, the shops along Churchill around the Lycee (as you go up the hill, before the roundabouts) are a good bet for souvenir shopping. The Haile Sellassie store, which had fixed prices, has been closed down as of early 2010 (likely due to construction projects along Churchill.
For excellent leather shopping, there is a cluster of small stores around the perimetre of the Stadium (near Meskel square; appears to be a main stop for minibuses going to Mexico Square or Piazza). Jackets sell for around 1200-1450 birr. Custom orders are possible at most shops. A number of other stores/outlets are found in the main malls on Bole, including Dembol, Friendship, etc. Prices might be slightly higher at the malls but the selection and layout tend to be better. Taytu, tucked in a corner of Dembol mall at Bole Olympia (the yellow mall), is renowed for its trendier bags.
For postcards. they are difficult to get. But there is one excellent place to buy them - a kiosk inside the Addis Ababa Main Post office. It has a wide choice of not only Addis Ababa cards, but also cards from all over Ethiopia. You can buy stamps and post the cards right at the place. The Ethiopian Post is efficient, and reasonably priced (0,25 eurocents for a card to Europe and 0,30 eurocents for a card to USA, Canada, Australia).