Rice Rations, A Rude Awakening

Apr 24, 2008 Published under Economics, Environment, United States

Something serious is going on when rice is rationed by the largest retailer in the world in the wealthiest country in the history of the world.

My team member Phil caught this story about it!

Wal-Mart’s Sam’s Club chain limits rice purchase

By Andria Cheng, MarketWatch

Last update: 4:17 p.m. EDT April 23, 2008

NEW YORK (MarketWatch) — Wal-Mart Stores Inc. said its Sam’s Club wholesale club chain is limiting the sale of some rice to four bags per member visit because of what it described as "supply and demand trends."

Jasmine, basmati and long-grain white rices will be subject to those purchase restrictions, as long as they are allowed by law, in the 594 clubs across the U.S., said Sam’s Club spokeswoman Kristy Reed. New Mexico and Idaho are the only two states that forbid such practice, she said.

Reed declined to comment specifically on whether the restriction stemmed from a shortage in imports or a rush among consumers to hoard these commodities. Wal-Mart said at this point, it’s not limiting purchases of flour or oil.

"We are working with our suppliers to address this matter to ensure we are in stock," Wal-Mart Sam’s Club’s, the No. 2 U.S. wholesale club, made the announcement after the media reported that Costco Wholesale Corp., the largest U.S. wholesale club, is limiting sales of items such as rice and flour.

A call to Costco wasn’t immediately returned.

Both warehouse clubs have seen their sales outperform the rest of the industry, as budget-conscious shoppers make bulk purchases in consolidated trips to save money as oil prices remain near record highs and the U.S. is mired in concerns about declining housing and credit markets.

The global food inflation has led to riots in some developing countries as well as to cutbacks on rice exports from Asia, the world’s largest exporter of rice.

Wal-Mart shares rose 0.65% Wednesday to close at $56.92. Costco shares climbed 2.2% to end the day at $69.60. End of Story

Andria Cheng is a MarketWatch reporter based in New York.

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