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Speaker 1: It turns out people are stocking up on boxes of

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Speaker 1: butter at Costco because of the high prices. There's a

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Speaker 1: man from New Plymouth who apparently is traveling over seven

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Speaker 1: hundred and fifty kilometers to Costco and Auckland to buy

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Speaker 1: the butter and bulk and then sell it back to

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Speaker 1: his community. And there's a video of people buying like boxes,

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Speaker 1: boxes and boxes of butter at a time. Patrick Noon

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Speaker 1: is the retired managing director of Costco and he's with

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Speaker 1: us now, how Patrick, Oh hell, how are you? I'm well,

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Speaker 1: thank you? Does this blow your mind hearing this? Or

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Speaker 1: is this exactly what you would expect?

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Speaker 2: It was pretty much what I would expect. Costco has

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Speaker 2: a great model where they have the low margins and

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Speaker 2: they're honest to that. And from time to time you say,

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Speaker 2: there's one of the fly items come up where the

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Speaker 2: market's gone a pie and price and Costco can maintain

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Speaker 2: the price that with their buying power, and all of

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Speaker 2: a sudden you've got great value in that business.

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Speaker 1: Yeah, so it looks to me like butter. There is

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Speaker 1: what is it ten dollars a cagey, which seems to

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Speaker 1: be to be about half the price of butter everywhere else,

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Speaker 1: because you're paying ten dollars for five hundred grams elsewhere,

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Speaker 1: aren't you.

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Speaker 2: I'm not in New Zealand, so probably what are you paying?

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Speaker 1: Where are you?

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Speaker 2: I'm in Sydney, Sorry, Sydney, Australia.

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Speaker 1: What do you pay for butter?

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Speaker 2: Oh that's a good question. I can't tell you right now.

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Speaker 1: How do you not do the shopping in your household?

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Speaker 2: No, Alas, I'm more of a strategic thinker. Heather.

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Speaker 1: You think you're the strategic thinker, but you try carrying

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Speaker 1: the mental hello to a home and then you tell

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Speaker 1: yourself you're in need. We don't need to go down

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Speaker 1: that rabbit hole anyway. How is it that they managed

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Speaker 1: to when everybody else is paying I think it is

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Speaker 1: about ten bucks for five hundred grams, and then Costco's

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Speaker 1: got a ten bucks for cage. How do they do that?

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Speaker 2: Well? The two things. One is that they had the

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Speaker 2: low margin, so they'll be able to offer butt with

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Speaker 2: low margins. The second thing is that Costco's buying power.

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Speaker 2: They're likely and I haven't been at Costco for a

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Speaker 2: year and a half now, but they're likely buying but

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Speaker 2: a well for worldwide distribution. So they're getting a big

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Speaker 2: volume break on the coast.

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Speaker 1: And is it legit like you're allowed to go in

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Speaker 1: and buy boxes at a time. They're not going to

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Speaker 1: stop you.

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Speaker 2: Not at all. No they should. There's very limited occasions

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Speaker 2: what that would happen. And for example, eggs, we did

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Speaker 2: it once with eggs, I remember, because of the egg

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Speaker 2: shortage in Australia, but I think they've done that in

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Speaker 2: the US as well. But most other items that they

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Speaker 2: can supply that commodity, they'll supply as much as you

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Speaker 2: want to buy.

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Speaker 1: Brilliant Patrick, thank you very much, really appreciate time. Patrick Noon,

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Speaker 1: retired Managing director of Costco. For more from Hither Duplessy

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Speaker 1: Allen Drive, listen live to news talks. It'd be from

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Speaker 1: four pm weekdays, or follow the podcast on iHeartRadio