Will High Priced Gas Kill Costco
There may be a ray of hope on the distant shores of High gas prices and outrageous transportation costs for local grown grocery stores, farmers markets, and even local manufacturers. The high price of gas my destroy Costco's advantage.
According to a recent study study published by the Leopold Center for Sustainable Agriculture, in Ames, Iowa transportation of food products has shot up 22% since 1981 (1). The study did not outline the source of this, but a regional look at the nation will show that since 1981 the increase of mega stores, exotic foods, and cost cutting warehouses have increased. The major factor for the mega low prices of such national chains is the ability for one location to purchase a HUGE amount of food at such a reasonable price that the additional transportation to get it to all it's local stores is more than recouped in the profit.
50 years ago if you had a small shopping list like this:
1. Milk
2. Bread
3. Clothes
4. Bank
5. Fruit and Vegetables
6. Dog food
7. Cough Syrup
You may make 7 stops in your local downtown district at separate specialty stores that either made the item locally or right in their shop. Today you'd make one stop at your local WalMart or Vons and take care of the whole group with no thought as to where it came from. WalMart has all it's manufacturer's basically 'drop off' their goods to them in North Western Arkansas at the best possible price and then, due to historically record low transportation costs in the US, deliver them all over the country in their own fleet of trucks. This is all intended to keep the price down and is LOW COST of Transportation driven.
A return to local values. As $5.00+ gallon gas is likely within the next few years and double that within 10 you may find value again at your local fruit stand, clothing store, and bakery. They keep their transportation costs down by making sure that their raw product or end product only makes one trip; to their store and into your hands. Sure if you live in Arizona this means that a Kiwi is going to be harder to find, and if you live in the North, Oranges are going to be expensive. AND if you live in the middle of nowhere, where there's no sustainable land, YOU might just have to move.
(1) http://www.blogger.com/www.leopold.iastate.edu/pubs/staff/ppp/food_mil.pdf
According to a recent study study published by the Leopold Center for Sustainable Agriculture, in Ames, Iowa transportation of food products has shot up 22% since 1981 (1). The study did not outline the source of this, but a regional look at the nation will show that since 1981 the increase of mega stores, exotic foods, and cost cutting warehouses have increased. The major factor for the mega low prices of such national chains is the ability for one location to purchase a HUGE amount of food at such a reasonable price that the additional transportation to get it to all it's local stores is more than recouped in the profit.
50 years ago if you had a small shopping list like this:
1. Milk
2. Bread
3. Clothes
4. Bank
5. Fruit and Vegetables
6. Dog food
7. Cough Syrup
You may make 7 stops in your local downtown district at separate specialty stores that either made the item locally or right in their shop. Today you'd make one stop at your local WalMart or Vons and take care of the whole group with no thought as to where it came from. WalMart has all it's manufacturer's basically 'drop off' their goods to them in North Western Arkansas at the best possible price and then, due to historically record low transportation costs in the US, deliver them all over the country in their own fleet of trucks. This is all intended to keep the price down and is LOW COST of Transportation driven.
A return to local values. As $5.00+ gallon gas is likely within the next few years and double that within 10 you may find value again at your local fruit stand, clothing store, and bakery. They keep their transportation costs down by making sure that their raw product or end product only makes one trip; to their store and into your hands. Sure if you live in Arizona this means that a Kiwi is going to be harder to find, and if you live in the North, Oranges are going to be expensive. AND if you live in the middle of nowhere, where there's no sustainable land, YOU might just have to move.
(1) http://www.blogger.com/www.leopold.iastate.edu/pubs/staff/ppp/food_mil.pdf
posted by Cemseller at 8:14 PM
0 Comments:
Post a Comment
<< Home