Wednesday, April 23, 2008
Kona Costco reported to be limiting sales of rice
Commenter ku ching left this report as a comment on my article, Could there be rice shortages and food rationing in Hawaii? Since comments are not so visible, I'll repeat it here, and thanks, ku ching, for your report:
On Monday, April 21, at Costco in Kona - 20 pound bags of rice - white and brown - were limited to "one" per family - due to a "temporary" situation.
I don't know how "temporary" the situation is - but I have a hunch that this "shortage" will be here for awhile.
However, in Waimea - at Foodland - there were no 20 pound bags of brown rice, but the 5 pound bags were on sale at $2.99. And there was a skip full of 20 pound Hinodes on sale at $8 something (with the usual "on sale" 5 bag limit). Had a variety of little bags.
At KTA - in Waimea - only 20 pound bags of expensive white rice (around $20) were available and only 3 bags of 20 pound bags of brown rice at $10.99 were on the shelf. Don't know about little bags.
On CNN this morning (Wednesday) - it was reported that Sam's Club - "nationwide" - had started rice rationing.
In today's news - on CNN - Costco is rationing rice not because there is a shortage of rice, but because it intends to maintain current prices.
As for other retailers - because they can raise prices due to supply/demand mechanics - this isn't the game that Costco wants to play.
Costco makes its money of the sale of memberships - and very little on its markups. And - it wants to maintain its markup policy.
The report said that american farmers produce twice as much as domestic demand - and the rest goes to exports. Therefore - there is really no shortage of rice, but only the prospect of higher prices - except for sellers such as Costco.