Sam's Club, Costco Limiting Rice Sales - - Tyler, Longview, Jacksonville |ETX News

04/24/08 - America

Sam's Club, Costco Limiting Rice Sales

The two biggest US warehouse retail chains are limiting how much rice customers can buy because of what Sam's Club, a division of Wal-Mart Stores Inc., called "recent supply and demand trends."

The broader chain of Wal-Mart stores has no plans to limit food purchases, however.

The move comes as US rice futures hit a record high amid global food inflation, although one rice expert said the warehouse chains may be reacting less to any shortages than to stockpiling by restaurants and small stores. Sam's Club followed Seattle-based Costco Wholesale Corp., which put limits in at least some stores on bulk rice purchases. Sam's Club declined to say if this is first time it has restricted sales of bulk foods.

The limits affect 20-pound bags, not retail-sized portions. Costco President and CEO Jim Sinegal says he doesn't want to create a panic. "We don't want to create a panic where we don't think there is a panic because if we weren't able to get any more rice or more flour that would be a different story. but we are able to replenish our supplies."

Sam's Club said it will limit customers to four bags at a time of imported jasmine, basmati and long grain white rice . The warehouse chain caters heavily to small businesses, including restaurants. A Sam's Club spokeswoman said she could not comment on whether the problem was caused by short supplies or by customers stocking up in anticipation of higher prices.

At a food bank in New York City the growing price of food is contributing to empty shelves, and people being turned away. "They're facing angry people on the line," said Tyrone Harrysingh of The Food Bank for New York City.

The Sam's Club restriction is effective immediately at all locations where quantity restrictions are allowed by law. It does not apply to other staples such as flour or oil. Sam's Club has 593 stores compared with 2,523 Wal-Mart Supercentres that combine a full grocery section with general merchandise.

Costco has 534 warehouses worldwide, most of them in the United States. A Wal-Mart spokeswoman said Wal-Mart stores have no plans for restrictions similar to those at Sam's Club. US rice futures soared to an all-time high on Wednesday as investors bet that surging world demand will continue to pressure already dwindling stockpiles.

Rice for the most actively traded July contract jumped 62 cents to 24.82 US dollars per 100 pounds (45 kilograms) on the Chicago Board of Trade, after earlier rising to a record 24.85 US dollars.

Relentless demand from developing countries and poor crop yields have pushed rice prices up 70 percent so far this year, raising concerns of severe shortages of the staple food consumed by almost half the world's population.

Information courtesy of the AP and ABC News.

Powered by Frankly